Tax on interest relief

Discussion in 'Property Tax and Accounting' started by Amjedk, Jan 9, 2016.

  1. Amjedk

    Amjedk New Member

    The planned restriction in B2L mortgages interest relief will impact many Landlords. Are there any strategies that can be used to minimize the impact besides trying to raise rents?
  2. Nicholas Wallwork

    Nicholas Wallwork Editor-in-Chief Staff Member Premium Member

    The main and obvious one is to buy and future properties in a Ltd Company as it doesn't effect them. I buy most of mine in Ltd companies and there is further protection as well as tax advantages.

    For existing properties owned in personal names I'm sure there will be some efficient tax planning but I'm not an accountant so couldn't give specific advise. Suffice to say any planning will have to take into account income tax, SDLT, capital gains (if transferring as it will be treated as a sale of moving into a Ltd Co) etc so it's going to be a juggling game and maybe worth just taking the hit and working out how to be more efficient in your houses as well as reviewing rents as you say!
  3. nmb

    nmb Well-Known Member

    Buying properties in a limited company can offer protection for your personal assets if ever your property interests were to experience difficulties. The taxation issue for personally held property is a little more difficult to balance now that the authorities have introduced recent changes. As ever, you should consult an accountant to get the best advice.

    The use of a company can also simplify the situation further down the line if you decide to sell all of your property assets. Rather than selling each individual asset, and the often lengthy paperwork involved, you would simply sell your shares in the company and the company itself would retain ownership of the property assets.
  4. Amjedk

    Amjedk New Member

    So far all my purchases are in individual names. I've started to increase my rents and going to hang fire and see what happens with the judicial review. The limited company option is very tempting however, one of the other drawbacks can be finance. I'm also looking in to SPV's (Special Purchase Vehicles). These are like Ltd co. but you use one for each property!
  5. Luke Masters

    Luke Masters Member Premium Member

    Limited companies will become the norm for professional investors to avoid these taxes I would imagine.
  6. nmb

    nmb Well-Known Member

    Is there a suspicion that the authorities are pushing everybody towards limited companies with the constant attack on personal taxation?
  7. I specialise in this subject and have contributed to several eBooks and discussion threads on The (moderated)There is no 'one-size-fits-all' strategy for tax efficiency.

    Partnership can be equally and sometimes even more tax efficient that Limited Companies.

    I will be happy to answer questions here. I'm brand new to this forum having only first heard of it today from a Google advert on the(moderated)

    I look forward to engaging and hope to learn from this forum as well as helping where I can.
    Last edited by a moderator: Jun 15, 2017
  8. Longterminvestor

    Longterminvestor Administrator

    Hi "The Landlords Union",

    It would be good to hear your thoughts on the future of the BTL market and how you see it performing in the short, medium and longer term. Personally I feel that with an acute housing shortage there will always be demand for rental property and eventually, as the government knows, all added expenses will be paid for by tenants.

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