New government tax legislations

  • Filter
  • Time
  • Show
Clear All
new posts

    New government tax legislations

    Hi thinking about buying my first buy to let property. With the new government tax legislations proposed to hit us by 2020 is it actually worth it. I would be repaying the capital aswell as the interest. Am I right in understanding that the government will tax me on the full rental income and not just the profit??
    Thanks for any help....

    By 2020, you will be taxed on the income, but you can claim 20% of the interest amount paid as an allowance.
    So, for most basic rate tax payers, there isn't a change.
    For all high rate tax payers, more tax will be payable.

    For a small number or base rate tax payers who were very close to the high rate threshold, the change means that they have become high rate tax payers for some of their income.

    If you're planning to buy a BTL property the increased SDLT is probably more of a negative right now.
    You might want to reconsider using a repayment mortgage - lot's of people do, but it isn't always the most effective thing to do.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      Ok thanks for your help how do I determine whether I am a high or low rate tax payer?? If I am a high rate tax payer will it be a substantial difference? My salary is around 33k a year.....


        Can you explain this interest allowance in a little bit more detail aswell please??


          Personal Allowance Up to £11,500 0%
          Basic rate £11,501 to £45,000 20%
          Higher rate £45,001 to £150,000 40%
          Additional rate over £150,000 45%
          The 20% is allowed as a tax credit.

          After 2020 none of your mortgage interest is not allowed as an expense claim against profit, therefore all rental income, less other allowable expenses, counts towards your total income. It's the higher rate taxpayer that suffers most as they previously got the full 40% relief.


            Ah i think i get it, but i was hoping to repay the capital can this be used as an expense claim or not??


              No, the capital isn't allowable.

              You should find an accountant and go through this stuff in detail.
              It's a key part of deciding whether you should get involved in letting property - do it personally or via a company for a start.
              These things need thinking through way before deciding whether it's for you or not.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


                Originally posted by tillerman View Post
                After 2020 none of your mortgage interest is not allowed
                I wish


                Latest Activity


                • Advice
                  by jhoggard

                  I currently have a property rented out in my own name with a fair bit of equity around 50% LTV this is actually a repayment mortgage which i'm looking to switchover to a interest only. When i do this i'm also taking money out of the property to put towards another which i'm looking...
                  20-01-2022, 14:25 PM
                • Reply to Advice
                  by SouthernDave
                  I started my limited company a year before buying the first property, then bought a second 2 months later, a third 3 months after that, a fourth 5 months after that and so on to where I am now. Our lenders have never said they want a separate company per property. Ive never heard of that, if it were...
                  23-01-2022, 17:40 PM
                • Reply to Advice
                  by jpkeates
                  I don't think we disagree.

                  The OP has one property and is looking to buy a second.
                  At that point in that business, lenders will want a company per property.

                  There's a point where that ceases to be the case, when the portfolio gets big enough, or, presumably when someone...
                  23-01-2022, 17:34 PM
                • Reply to Advice
                  by SouthernDave
                  i concur with this, once you get over 4 properties, they consider you to be a portfolio landlord and want to start seeing cashflow forecasts before lending to make sure the company is buoyant. Directors guarantees each time but no limits on number of properties or number of dofferent lenders....
                  23-01-2022, 16:50 PM
                • Reply to Advice
                  by JamesHopeful
                  This is not true in my experience. I currently have eight properties in the same company, across a number of different mainstream BTL lenders, and none of them have batted an eyelid at the number.

                  Where I have known lenders worry about the company is it doesn't have the correct SIC code...
                  23-01-2022, 16:28 PM
                • Reply to Advice
                  by theartfullodger
                  Depends to a great degree on tax regulations over the coming years. We only know what the rules are today, not what they'll be in future e.g. when you retire

                  I expect chancellors to cut back on the advantages of people owning property through companies (well, wouldn't you if you were chancellor)...
                  22-01-2022, 13:06 PM
                • Reply to Advice
                  by Gordon999
                  1. No. You have not sold the property yet

                  2. 19% on profit by company.

                  3. Seek advice from accountant.
                  22-01-2022, 09:36 AM
                • Reply to haring inherited property
                  by halfax
                  thanks for help to everyone who replied, great forum
                  21-01-2022, 18:55 PM
                • haring inherited property
                  by halfax
                  i am inheriting a property and would like to place half in my grandsons name.
                  as anyone done similar?...
                  19-01-2022, 18:12 PM
                • Reply to Looking for tax / financial advice for a BTL /holiday let long-held portfolio
                  by ifallelsefails
                  I watched a webinar from Landlord studio and this man Tony Gimple was featured in it. Have a look at his Linkedin profile:
                  He has a website whereby he consults exactly to your situation:
                  21-01-2022, 17:13 PM