Tag Archives: Mortgage Interest

Potential impact on restriction on buy to let mortgage interest

UK House Prices

UK House Prices

Would it be beneficial to move buy-to-let into a company to keep mortgage interest relief?

  • Mortgage interest relief is being cut for individual landlords from 2017
  • Companies continue to benefit from the full relief
  • But running a company has its own costs and administrative issues

How much tax would one pay?

A basic rate taxpayer pays 20 percent while a higher rate taxpayer pays 40 per cent and tax is 45 percent for additional rate taxpayers. Income from rent is added to personal income from other sources to decide the tax rate.

Buy-to-let Lending

Buy-to-let Lending

According to rules being introduced in April 2017 will see the tax relief reduced up to 2020 when it will be set at a maximum of 20 percent.

What should you consider?

A company pays tax on its profits whereas an individual pays based on their income. Companies pay a lower tax rate than individuals. Corporation tax is currently 20 percent and is due to drop to 18 percent by 2020.

Decreasing Numbers of Younger Homeowners

Decreasing Numbers of Younger Homeowners

Are you ready to run a business?

The HMRC has very few requirements for individual landlords. They just have to complete a self-assessment tax return each year that takes account rental income and any expenses and reliefs. But companies have a range of responsibilities such as completing annual returns and accounts, all of which could mean paying for an accountant. It could also get more complicated if you start involving shareholders and different directors.


UK Landlords' Assets

UK Landlords’ Assets

If you have concerns on how these changes will impact on you or require further information please contact us.

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