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Buy-to-Let Tax Loopholes: How to use the current disruption to your advantage

Buy-to-Let Tax Loopholes: How to use the current disruption to your advantage

We recently spoke about the nearing deadline for the stamp duty holiday, but attention is now being drawn to the fast approaching cut off date to send in your self-assessment tax return.

For those whose incomes have already being hit by the pandemic, the thought of a looming bill from HM Revenue and Customs may be daunting.

The affect on landlords from the pandemic is clear – they’ve been battered by falling rents and ever mounting arrears and despite this, their tax bills this year are likely to be higher than ever before following a crackdown on many property investment tax reliefs in recent years.

However, there are ways for savvy investors to use the current pandemic to their advantage. For example, landlords who have had their properties empty may be able to claim for the cost of council tax and heating during this period.

Of course, investors can also use the current stamp duty holiday to change the way they structure their portfolios. They can be moved from personal names to limited or SPV companies, or simply transferred to a spouse. Over the long term this can certainly be more tax efficient dependent on personal circumstances, however it will incur stamp duty so it’s best to do so before March 31st.

The number of buy-to-let investors who have set up limited companies or SPV’s to manage their properties hit a record high last year. Others have been further cashing in on the staycation boom, by using their furnished properties to house groups of friends and families. Crucially, these holiday home lets, similar to vanilla buy-to-lets, can offset all mortgage interest against revenue when held within a company.

Rumours have surfaced that Chancellor Rishi Sunak will hike capital gains tax rates, so we advise any investors with second homes who are thinking about selling, to do so sooner rather than later. Other proposals by the treasury are to replace council tax and stamp duty with a property levy, which would certainly hit property investors with numerous assets hard.

If you’re looking to sell your home or any investment properties in anticipation for the possibility of increased taxes, or would simply like some free and impartial advice on how to be more savvy when it comes to your property taxes, please do not hesitate to call Love Your Postcode on 0800 862 0870.


Buy-to-Let Tax Loopholes: How to use the current disruption to your advantage
By Love Your Postcode
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