How to reduce your buy-to-let tax bill
- 23rd July 2008
- Property Tips
Buy-to-let is still proving to be a sound investment and prudent tax management can only add to the bottom line.
Most buy-to-let investors and landlords know the obvious tax exemptions, below are some that are not always so clear cut.
- Always keep a separate business bank account so you can easily demonstrate that funds borrowed are part of you property letting business
- Treat all your properties as one enterprise, so you don't have to worry about some making a profit and some losing
- Most investors will see their tax position improve with the abolition of taper relief and the introduction of the 18% flat rate on gains above the annual CGT of £9,600. Check with your accountant that you understand the implications
- Properties can be transferred between spouses without any capital gains, so make sure that you take full advantage of this exemption if you are married
- If you have lived in any of your properties at any stage you can claim it as your principle private residence (PPR) and improve your captial gains position
- Do remember if you claim PPR you must have occupied the property, you can't simply claim it as such
Managing your property portfolio correctly is important, not just claiming all the tax relief you are entitled to, but being aware of how ownership can impact the bottom line.
FREE & INSTANT PROPERTY VALUATION
IN JUST 60 SECONDS