Jonathan Russell from ReesRussell LLP has outlined below for us, some upcoming tax changes which will be relevant to landlords and buyers. Click here: Tax Changes RR for more information on other tax related updates.
Rent a Room
- From 6 April 2016 rent a room relief in-creases from £4250 pa to £7500 pa
- From 6 April 2016 the 10% wear and tear allowance on furnished lettings is abolished. After this date landlords will only be able to deduct the costs they actually incur on replacing furnishings and white goods.
- From April 2017 tax relief on interest incurred on residential property lettings will be restricted. Over a four year period the relief will be reduced to a maximum relief of 20% (or basic rate tax) in 2020/21.
- There will be no equivalent restriction in interest deductions for properties owned within limited companies and remember corporation tax reduces to 19% from 1st April 2017 and to 18% from 1st April 2020
Stamp Duty Land Tax
- There is also the additional 3% stamp duty land tax to be levied on any purchases of 2nd homes and buy to lets completed after 31st March 2016.