The most significant change of the last few years has been the withdrawal of higher rate income tax relief for loan interest on debts related to dwelling houses. We are now coming to the end of the second year of the phased introduction of the withdrawal of higher rate tax relief.
The change was first introduced from April 2017 and will be fully implemented by April 2020. The percentage of these costs providing marginal tax relief is restricted on a scale depending on the tax year.
If you haven’t already, property owners should model the new rules to assess the impact on rental yield, and where necessary take action.
Action could include:
Other ideas to be considered before the end of the tax year are:
Changes proposed by the government include:
With property matters, it is always important to take tax advice due to the impact property has on all areas of taxation. There are opportunities for planning which can be taken advantage of every tax year.
For more information please contact your local Crowe contact or read our Guide to the tax implications of investing in residential property.