Landlords will need to prepare for the tax changes that are being introduced over the next 4 years. In 2015 the Government made an announcement, Landlords who were high-rate or additional-rate taxpayers would no longer be able to deduct mortgage interest from their rental income and could only secure relief on the interest at the basic tax rate rather than the higher level they had enjoyed up to this point.

This applies to landlords who own personal property as well as those letting property in a partnership, but they have yet to be applied to furnished holiday lets or properties held in a company.

Although this is being implemented from April 6th 2017, the loss of relief will not disappear automatically. Relevant tax returns can be submitted any time between then and 31st January 2019, so there is a few years until the force of the changes will be fully felt by the concerned.

Landlords who own their properties outright will not see any difference to their tax bills. Additionally, Landlords circumstances will only change if they are currently a higher or additional-rate taxpayer.

Many Landlords are now facing up to the reality of increased tax bills, with the reality that potential changes will create issues for basic-rate taxpayers too in the future.

By looking at the last year of property accounts, a tax expert at Sivapalan & Co will be able to confirm if a landlord will be affected and by how much. We would be then be able to look at mitigation and strategic planning to minimise the effects of these tax changes which also looking at succession planning to provide the right solution for each client.

At Sivapalan & Co we are happy to answer any of your questions regarding the changes to the tax system and we welcome you to “Say Hello”.