Two Thirds Of Landlords Pay Basic Rate Tax

Two thirds of individual landlords are only liable for the basic rate of income tax according to data released by the government. The Residential Landlords Association (RLA) says that it challenges the myth that landlords are wallowing in vast sums of money and so can cope with tax rises. According to the figures obtained in response to parliamentary questions from DUP MP, Jim Shannon, of the just over 1.9 million unincorporated individual landlords returning a self-assessment tax return, two thirds were in the basic rate bracket, thirty per cent were in the higher rate band and four per cent paid the additional rate. Read more on the RLA website.

Tax Changes Put More Pressure On Buy-To-Let Landlords

On 6 April, buy-to-let landlords will begin to feel the direct effects of the next tightening of taxation of the sector. From that date, tax relief on landlords’ mortgage costs will be restricted to the basic rate of income tax. And, over the next three years, the proportion of their borrowing costs that landlords can offset against tax will taper down to zero. On top of this, landlords are affected by new rules restricting other deductible expenses that they incur from renting property, including reforms limiting tax relief for wear and tear in fully furnished properties. The government has published guidance and a series of worked case studies to help landlords understand how the changes will affect them. Read more on the CML website.