This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Marketing

A bit of data which remembers the affiliate who forwarded a user to our site and recognises orders from those who become customers through that affiliate.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Enrol now on the free landlord tax strategies course


To enrol in the 7 tax saving strategies email course complete the form below. The first module will be emailed to you immediately.

Enrol now on the free landlord tax strategies course

Thank You!

Free Tax Saving Strategies Course
The seven FREE property tax busting strategies course reveals the secrets of how to legitimately beat the taxman and boost your property profits!
View All Questions

How can I minimise the tax hike once the new rules come in?

Question I'm 43 and a single parent. I have four buy-to-let properties, and me and my children currently live with my parents. What will be the best way forward for me when the new tax changes that will come into force, stopping you offsetting mortgage interest against your rental income? My accountant said that once the new rule is 100% by 2021 then this will put me in a higher tax band. What can I do to avoid this from happening? One of the houses I rent out was my main residence for 16 years but I have changed the mortgage from a residential to a buy-to-let and recently remortgaged. Can I move back into my main residence with a buy-to-let mortgage and will that help by bringing my tax bill down as I really can't afford to lose my child tax credit (CTC) as I have huge mortgage bills to pay on the buy-to-lets each month. I have a part-time job earnings of £5,000 a year too. What is the best way forward to leave the properties for my children and pay less tax? All properties are in my sole name only. Rental of two properties are £1,450 per calendar month per month; one fetches £1,500 and the last one £1,250 per month - these are gross figures. My mortgage liabilities per month consumes most of the rental incomes put together.

Arthur Weller replies:
When the new rules are fully phased in, your taxable income will rise considerably, it will be in the region of (12 * (£1,450 + £1,500 + £1,250)) + £5,000 = £50,400 + £5,000 = £55,400. This will affect your CTC and will detrimentally make a difference to the high income child benefit charge. In your circumstances, it may be necessary to seriously consider selling your properties and redeeming your mortgages. Alternatively, if your mortgage lenders will allow the transfer of your mortgages into a limited company, consider the possibility of incorporating your rental business.


Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

The first issue is free so click here to try today!

Got a burning tax question?

Why not submit a tax question to our tax advisors

Ask a Question