The most recent and perhaps significant change was the announcements of a withdrawal of higher rate tax relief for interest expense on debts related to dwelling houses.
This started to be passed in from the current tax year 6 April 2017 with a restriction relating to 25% of the interest expense.
In the year to 5 April 2019, the restriction will be applied to 50% of the interest expense, with the percentage increasing to 75% and 100% in the years to 5 April 2020 and 2021 respectively. This will add further pressure for buy-to-let landlords with significant debt to de-leverage their property portfolios or alternatively (in some cases) face income losses.
If you haven't already, model the new rules to assess the impact on rental yield, and where necessary take action. In terms of tax, the first time landlords will see an impact on their pocket will be in January 2019 when their tax bills may be higher.
Some planning points to take into account are:
Before the end of the tax year, the following should also be considered:
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.