How to prepare for April’s tax changes
As one of the Government’s more impactful alterations to the buy to let sector, April’s changes to tax relief for landlords will affect a number people after its inception. To be phased in over the next four tax years, the changes will mean a reduction of buy to let mortgage interest tax relief to 20% by tax year 2020/2021.
First announced in the Summer Budget of 2015, the buy to let market has since gone through several other changes, such as the alterations in stamp duty and tougher underwriting standards. Although this has given landlords time to prepare for the alterations in tax relief, the changes have come around fast, so here is a quick guide to help:
How can landlords prepare?
Talk to an expert - As one of the more complex alterations implemented by the Government, it is important you speak to an expert about your options. As well as an accountant, speaking to your adviser can also help put things into perspective, review your portfolios and support you in making the right decision.
Research and networking - With such a large community of landlords in the UK, there are plenty of like-minded people going through the same challenge. There are a number of forums, websites and seminars where you can talk to fellow landlords and share ideas on how to overcome obstacles. We want to help make your property investment profitable and secure, so as well as talking to us, we recommend doing plenty of research and staying up to date on the latest sector news.
Weigh up your options - Finally, balancing what is an important decision is a task many landlords are facing. There are of course several options, some more publicised than others. One important option is considering incorporation, or using a limited company set-up going forward. This is not suitable for everyone, which makes our conversation with you even more important.