PUBLICATION DATE:  JULY 2020
PAGES:  173
EDITION:  8th
ISBN:  9781911020561
STATUS:  IN STOCK

The Big Landlord Tax Increase

How to Beat the Cut in Mortgage Tax Relief

By Carl Bayley BSc FCA and Nick Braun PhD

Many landlords will see their tax bills increase significantly now that the tax relief on their buy-to-let mortgages has been reduced.

This guide explains what you can do to beat the tax increase.

Tax planning topics include:

• Transferring properties to your spouse or partner
• Using a company
• Increasing or postponing tax deductible expenses
• Employing family members
• Selling property
• Reducing buy-to-let mortgages
• Using alternative investment structures
• Investing in other types of property
• Managing your dividend income (if you have another business)
• Becoming non-resident
• Making pension contributions

The guide is essential reading for:

• All residential landlords with mortgages or other finance costs
• All tax advisors and accountants

What Information is Contained in the Guide?

Subjects covered include:

• All relevant tax changes announced in the March 2020 Budget and the July 2020 Summer Statement.
• How the new interest tax relief rules operate, with lots of examples.
• Nine case studies showing how much extra tax different landlords will pay (ranging from £0 to £22,500).
• Case studies showing how landlords will be affected by the coronavirus crisis this year.
• How falling interest rates may completely protect you from the tax increase.
• How you may be able to beat the tax increase by simply increasing rents.
• Why you should consider postponing some tax deductible expenses until 2021.
• A detailed look at expenses that can be postponed, including replacement kitchens, bathrooms, furniture, carpets, etc.
• How some landlords can protect their child benefit or personal allowance by accelerating expenses - spending this year instead of next year.
• How one landlord will save £2,215 by waiting until 2021/22 to sell a car used in his property business.
• Loan arrangement fees - How one landlord enjoys an additional £2,700 saving by amending their previous tax return.
• How to completely reverse the tax increase by making pension contributions.
• Why it may not be a good idea to reduce your mortgages in the current climate.
• The benefits and drawbacks of selling property to beat the tax increase.
• How one landlord will increase her income by £10,000 by selling some properties.
• How landlords with a separate company business can save tax by timing their dividend income carefully.
• How to beat the tax increase by becoming non-resident.
• Property not affected (commercial property and furnished holiday lettings).
• Using alternative investment structures (shared equity and syndicates).
• How to save tax by transferring property to your spouse or partner.
• Full details of the stamp duty land tax payable on property transfers, including the recently announced stamp duty holiday.
• The benefits and drawbacks of using a company to invest in property.
• How one investor will see their annual tax bill fall by £32,100 by using a company.
• The latest HMRC views on how you can transfer property into a company free from capital gains tax.
• Additional, expanded details on the scope of the stamp duty land tax ‘partnership exemption’.
• The cost and availability of mortgages for company investors.
• Other ways to save tax by using a company, including leasing property to your own company and using a property management company.
• How using the cash basis allows you to accelerate taxable rental profits into a year when you have a lower tax rate.

About the Authors

Carl Bayley BSc FCA began his career as a chartered accountant over 30 years ago and is now one of the country’s most respected tax experts. He was Chairman of the Tax Faculty at the Institute of Chartered Accountants in England and Wales (ICAEW) from 2015 to 2018 and is currently a member of the Institute's governing Council.

Nick Braun PhD is Taxcafe's Managing Director and has been involved in the tax publishing world since 1989 as a writer, editor and publisher.

 

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