If you are a landlord, then you're probably aware of the forthcoming changes to allowable expenses.
Now is the time to be considering your options.
In our latest blog, we outline these changes and offer some food for thought.
Say farewell to your generous Loan Interest deduction....
Large property portfolio with high levels of interest on borrowings? This will affect you.
You can still have 100% deduction of loan interest on a mortgage for 2016/17, however from 2017 it will be phased out as follows....
2016/17 100% deduction
2017/18 80% deduction
2018/19 60% deduction
2019/20 40% deduction
2020/21 20% deduction
2021/22 0% deduction
You could consider....
1. Full incorporation - by moving properties and loans into a company.
2. Pay down your borrowings.
3. Sell up!
Is there any good news...?
Wear & Tear Allowance...
The 10% deduction which was allowed against total rent income is being abolished.
Landlords will now be able to claim a deduction as and when they spend money on the property.
Why not consider delaying any property expense until April 2016 to get the full deduction!
Thinking about de-cluttering that spare room? Why not let it out and take on a lodger....or even start a small B&B in your own home? You can have tax free rent of £7,500 per year from April 2016.....!
Do you have a large property portfolio and unsure what to make of these changes?
We can advise you on the best course of action to take.
For further information on any topics covered in our blogs, or if you would like to speak to us about our pro-active Accountancy & Tax services, contact Brian or Caroline on 0845 303 1144 for a chat or email firstname.lastname@example.org.
Cooper Curtis Accountants have offices in Warwickshire, Birmingham and Manchester.
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Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published.