We are property tax specialists having expertise in all types of taxes related to the property sector. We are experts on capital gains tax, landlord’s income tax, stamp duty land tax (SDLT), value added tax (VAT), corporation tax, inheritance tax (IHT), Capital allowances, tax efficient structures & strategies, non-resident landlord scheme, BTL SPV & JV and many more.
A furnished holiday let (FHL)
Furnished holiday lets have a history of producing higher yields due to the favourable tax treatment the enjoy compared to buy to let, so long as the strict tax rules are met and the statutory definition is met , there is an additional advantage to the owners in that of being able to occasionally use the property for their own use, A Furnished Holiday Let is a type of short-term rental property, with the following advantages:
- Costs of furnishing/refurbishing the property are tax-deductible;
- Profits as treated as earnings, allowing you to make tax-advantaged pension contributions;
- Availability of Capital Gains Tax reliefs when the property is sold
All of the above reliefs are NOT available to individual investor of Buy to Let Property.
One thing to bear in mind is if your turnover exceeds Vat registration threshold, then you will be required to charge vat at the current 20% to the tenants
Buy to let
Residential buy to let properties has become a favourite with many property investors’ and is becoming part of the serious property investors portfolio in the recent times, this may be due to its perceived low-risk, however in the last few years a prodigious amount of tax legislation has brought about the need to consider the buy to let programme in tax planning terms more than ever, i.e. the question asked more than ever before investing is should the purchase be outright purchase, financed using a buy to let mortgage, either personally or via a limited company.
Many investors are now using limited companies to purchase buy to let properties, as mortgage interest relief is still available. Over half of buy to let mortgage applications are now being made via property investment companies
Mortgage Interest relief (S24)
From April 2021, income tax relief on residential property Mortgage costs will be restricted to the basic rate of tax. This means that the amount of income tax paid on rental income will increase as a result, particularly if you are a higher or additional rate tax payer. There a number of strategies available to property investors to mitigate the impact of section 24 , e.g. Paying off the mortgage, Incorporating the portfolio, Furnished Holiday Lets, using Deeds of Trust or Partnership and assess the portfolio to see whether some or all should be disposed, professional expert advice is a must.
Even if it doesn’t make sense to incorporate your existing properties, you can still purchase future properties using a property investment company.
We are here to ensure that you get the advice suitable to your requirements.
please get in touch with our friendly team either by calling us on 01892 552 696 or emailing on firstname.lastname@example.org We will be delighted to walk you through your potential property investment journey