Top Ten Tax Tips for Landlords
What are the top tax tips for landlords?
- Keep detailed records of your annual income and expenditure for your property rental business
- Claim all costs of running the property rental business, including mileage/travel costs if you physically collect the rents
- Consider operating your property rental business through a limited company, as tax rates may be lower
- Keep details of all capital costs of acquiring properties, such as legal fees, SDLT etc., as they will be needed when the property is sold
- If you have lived in the property for any period of ownership, document the dates so that exemptions can be claimed when the property is sold
- Bear in mind the extra 3% SDLT on any property purchase that is not your main residence
- Consider transferring properties to trusts as a way of passing on wealth to the next generation in a tax-efficient way
- If married or in a civil partnership, you may want to put properties into joint names, and make an election to vary the property ownership, and therefore the property income, from the standard 50/50 split to reduce your joint tax bill
- Beware that gifts of property to anyone other than your spouse could cause a Capital Gains Tax liability
- When selling a property, make sure you make best use of all annual allowances and basic rate tax bands, and those of your spouse/civil partner
There is no substitute of individual tax advice tailored to your own particular circumstances!
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