Buy to let tax update for landlords – October 2018


Simon Misiewicz

19th October 2018

Article relevant to the tax year 2018/19

What are the most talked about buy to let tax subjects?

Throughout the month I have been reviewing the number of hits that we have received on our Optimise Accountants website.

Capital Gains Tax (CGT) the most talked about buy to let tax subject

Unsurprisingly the largest number of views on our website has been an article the avoidance of Capital Gains Tax (CGT) when selling a buy to let property. In this article we talked about CGT is first calculated. We also discussed the many reliefs that are open to landlords when looking to reduce CGT such as Private Residency Relief (PRR), lettings relief. We also picked on the subject of moving properties into a limited company. This is clearly one of the hottest subjects around at this time.

Transfer properties to children without CGT

Given the impact that Section 24 has on landlords many of them have looked at transferring properties to their children. The issue with transferring properties to children is the CGT liability that will arise. However, as our article explained that CGT may be mitigated by using your IHT lifetime allowance by transferring properties into a trust and then back out again into the child’s name.

Private Residency “Relief to avoid CGT on a buy to let

One of the other articles that we wrote was about mitigating CGT by moving into a property. It should be common knowledge that you do not pay CGT when selling a property for the period that it was your principal main residence. As we explained in this article it is possible to move into a buy to let property and then benefit from the PRR and lettings relief that we mentioned previously.

Download your buy to let tax guide here, written by our property accountants

Transferring properties to a limited company

As we have just seen from the above, we talked about reducing CGT when moving properties into a limited company. We talked about the transfer of properties into a limited company in this article. Section 24  prevents landlords offsetting mortgage interest against their buy to let income, as we saw in another article. This is why limited companies has become such a hot topic. Property investors up and down the country now wish to move their property portfolios into a limited company structure.  They wish to do this without paying any Stamp Duty Land Tax (SDLT) or CGT. In this article, we explained how this may be achieved through the partnership route.

Our property accountants and property tax advisors are always on hand to help our clients. The sole aim is to build their wealth whilst paying less tax on their buy to let portfolios.

Loans between limited companies

You can transfer money from one limited company to another for the deposit of a buy to let property. As we explained in our article that you able to make these types of loans without any tax liabilities. One company may be making money but you want a separate company for pure buy to let investments. This is more tax efficient than shareholders extracting dividends, which are taxable, from one company to simply loan it to another.

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