Landlords

From Buy to Let to HMO, let us take the worry out of your tax affairs.
Didoli!

Buy to Let is a popular choice here in north Wales. From high yield flats in urban areas, to large family properties and rural locations. There is something for every type of property investor.

Let’s take a brief look at some of the tax points you’ll need to consider.

Tax Returns and HMRC

Treth a delio HMRC

Property Income is reported under Self Assessment for Individuals or Corporation Tax for Companies.

Property Income is a special type of income in tax law. It gets taxed under income tax, but it doesn’t attract National Insurance contributions and doesn’t qualify as pensionable earnings.

You’ll need to be registered with HMRC and have a Unique Taxpayer Reference (UTR) code. For jointly owned property, you’ll both need one.

The tax year runs from 6th April to the following April. Self Assessment returns are due by 31st January following the end of the tax year. The tax payable is also due on 31st January along with a payment on account for the next year.

Property Income is reported on form SA105. Depending on your employment status, you will also have to complete the main return (SA100/101) or if self employed, SA103. Partnerships need to complete SA800. It can get complicated!

Mortgage Interest and Expenses

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Mortgage Relief is no longer allowable in full against your tax bill. Instead, you’ll get a tax reducer worth 20%.

Most expenses incurred will be allowable for tax. Where items are replaced, special rules are in place to determine what is allowable.

We can ensure you maximise your expenses and keep your tax bill as low as possible.

Book Keeping and Admin

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As a Landlord, you’ll need to keep records of all your financial transactions.

We’d always recommend a separate bank account for this. Don’t mix business with pleasure!

There are software packages available to help. General names like QuickBooks or Xero and more specialist packages for portfolio landlords. For lots of people though, a spreadsheet will do the job.

Ensure you keep receipts, invoices and rental statements and deposit scheme details.

Tax Planning

Cynllunio Treth

There are various tax planning opportunities for Landlords here in north Wales.

For jointly owned property, where one person is a higher rate tax payer, it is usually possible to split the rental income in a more beneficial manner.

Capital Gains Tax and Inheritance tax can also be reduced with some careful planning.

For personal owned properties, significant benefits can be obtained by moving to a different ownership structure, either a limited company or a partnership.