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Fresh thinking for a new tax year

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The 2017/2018 tax year saw 6/10 landlords report an increase in their tax bill, and with the average tax increase hitting the thousands, is it time to consider a new outlook for the upcoming tax changes?

By tax year 2020/21 the amount of mortgage interest costs a landlord can offset against rental be zero, replaced by a basic rate tax credit. For most personal name landlords this will significantly increase the tax charged on their property income.

Other recent tax changes include:

  •  3% stamp duty surcharge on second homes
  • Wear and tear allowance removed
  • Insurance premium tax increased

Going forward, should Paragon landlords plan to re-evaluate their portfolios, adjust accordingly and take out future mortgages via limited companies to take advantage of the tax benefits?

 

To find out more about the tax benefits of taking out mortgages under a limited company speak to your local RM today.

Making tax digital

The government are encouraging individuals to go digital with their VAT and income tax for landlords. You can find out more about the MTD plans here at the gov.co.uk website.

To see what products Paragon have on offer, take a look at their Buy to Let portfolio products.

Becoming a limited company may not be the best choice for everyone, so please consult your tax advisor for the best options available to you.