We understand, the news cycle has been non-stop regarding rising energy bills, the closing of the holiday home tax loophole and the energy certification that will soon be required. A stamp duty tax rise was postponed, as well as a fuel duty rise and other taxes. Although yields are set to reduce, this can be offset by doing some of the following to reduce tax, and staying in the buy to let business.
1: Keep Receipts for Tax Deductibles
Travel costs, phone bills, property subscriptions and legal fees are all tax deductible in the property industry.
2: If The Home is Furnished and is a Business. A holiday home that is a business can fall under 10% business CGT, but this means you would have to sell your entire portfolio, be that one property, five or ten, as long as they are registered under the same company. Otherwise the CGT rate is 28%.
3: Consider a Company Structure. Due to the accountancy costs of filing tax claims for a company, this step may only be viable if you hold multiple properties. If so, a limited company allows you to offset mortgage interest payments from income on your tax bill. Offloading rentals will be billed at 19% rather than the 28% CGT rate. Your rental income will be charged as corporation tax. If landlording takes up part or most of your time, then creating a business structure makes the most sense. However this involves keeping properties for the longer term, ‘house flipping’ is viewed by HMRC as a private venture.
4: Reclaim for Void Periods
When the property is unoccupied, any bills and maintenance costs can be deducted from your tax bill. Just make sure to keep dated receipts and provide an exact time period. The less ambiguous, the more willing HMRC are to accept these submissions.
Reddbox is just about to launch new insurance policies so you can take out insurance, manage your plans, and streamline your property management all in one app, so hang in there!
Our offer: Download the app and start saving time managing your properties. Follow the screens to provide your details, and that’s it. Some of the key features why you should consider Reddbox are –
- A completely app-based, super simple service booking process.
- Options to pay for the service over a few months without any additional interest or fee. See our rates here. Be quick, we are running promotional rates at the moment.
- You can book the service seven days a week, which means no need to disrupt your busy day.
- A very transparent cancellation and refund policy.
- And the best one – Reddbox will automatically organise all the relevant documents such as invoices and certificates.