In2017 the government introduced new laws aimed at reducing the tax relief enjoyed by landlords of private buy-to-let properties. The law removed tax relief on loan interest (at the time a landlord was able to set 100% of the annual interest against income) through a phased programme.
April 2020 brings with it the end of this phasing. Landlords no longer enjoy tax relief on interest and instead will be faced with a flat tax credit of 20% for mortgage interest. But it doesn’t end there.
Along with this well-publicised change, there are other changes. Landlords that incur a capital gain liability will now have just 30 days to pay the tax due. In the past such gains were normally included in annual tax returns, making payment a less immediate liability.
In addition, landlords that had previously lived in a property at some point prior to letting it, could exclude gains for that period of occupation when calculating CGT liability and also exclude the last 18 months of gains before the sale. This 18 month period has now been reduced to just 9 months.
The rules around letting relief have also been changed. The previous CGT relief of £40,000 (or £80,000 by joint owning couples) on capital gains realised on the sale of a second residence that was previously their primary residence, is now only applicable if they are living in the property at the time of sale.
Of course, to incur a CGT tax liability, one must first make a capital gain and the good news is that this year the individual annual CGT allowance is £12,800 before tax becomes payable.
Download our Free First Time Buyers Guide
Recent posts
Recent data from Rightmove shows the most expensive streets in Great Britain, with the majority being situated in the capital.
Best UK Mortgage Rates this Week
Yesterday
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
The Bank of England Governor, Andrew Bailey, has advised that, due to the “very big energy shock” the economy is facing, they won’t be in a rush to increase UK interest rates.
Many homeowners don’t realise that a simple act or oversight could invalidate their home insurance policy. Home insurance is essential in protecting your most valuable assets; however, it is important to understand what affects your cover to ensure you are fully protected.
In certain areas, impressive views are one feature that buyers are willing to pay price premiums of more than 30 per cent.
The UK mortgage market is seeing lenders withdraw deals and hike mortgage rates amid the escalation of conflict in Iran. This isn’t great news for borrowers, with the average rate for a two-year fixed deal sitting above 5%.
Statistics now show that those looking to purchase a property would have to save a deposit bigger than their annual gross pay.
Analysis from the Office for Budget Responsibility (OBR) shows that those looking to buy their first home could face a sharp increase if house prices follow the latest predictions, as Coventry Building Society suggests.
More information
Trusted by
