Is forming new company going to prevent BTL taxation?

In April 2017, new taxation changes will affect the buy-to-let landlords in the UK which will ultimately minimise their profits.

With these new regulations in place, professionals from the legal and finance and property sector, have formed a new specialist property finance firm called Buy to Let Restructuring. They will be helping BTL landlords that the new tax changes will affect. This followed from the announcement from Chancellor George Osborne who said  “The current system of mortgage interest tax relief for buy-to-let investors was to significantly change.”

New laws will mean that landlords will not pay tax on their profits relating to their income tax band but on the basic rate of 20%. Although this will not affect basic rate tax payers, the majority of landlords fall into the higher tax band, meaning there will be a significant impact financially for them.

Mark Andrews, one of the  directors of Buy to Let Restructuring said “April 2017 heralds a depressing new dawn for many buy to let landlords who have yet to realise the doomsday scenario they have potentially been dealt by the Treasury. Many hard-working, responsible landlords will have their finances thrown into disarray and pension plans in ruins. And for many tenants it will mean the loss of their homes because vast numbers of landlords will be forced to exit the market, or significantly increase rents to cover their elevated costs. What’s particularly troubling about the imminent new changes, is a worrying lack of awareness about the huge financial implications for buy to let landlords. Last year a poll showed that the vast majority of people still think buy-to-let is a great idea — particularly for retirees. I think it’s something we have been conditioned into over the years due to the fact that so many people have made an excellent living within the buy to let sector. However, unless awareness about the changes April will bring is generated immediately, followed by swift action on the part of landlords, the industry is facing something of a crisis.”

You can read the full article published in Property Reporter 

Image Credit Hunters Race on Unsplash

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