Married Couple? Save Tax on your Buy To Lets without Incorporating..

Tax Efficient Solutions For Married Couples

From April 2017 the government is phasing out mortgage interest rate relief on Buy To Let property at higher rates of tax. This means that the majority of private Landlords in the UK will receive ever increasing tax bills over the next four years, making the Buy To Let dream far less attractive.

In last week’s blog we took a look the pros and cons of moving your Buy To Let properties into a Limited Company in exchange for shares.

To make that route worthy of consideration I would suggest that you really need to be a Landlord with a good number of actively managed properties valued at around or above £2m.

There are many Landlords, however, some labelled as “accidental” who do not fulfil this criteria and for them the potential costs involved in transferring their lettings business into a Limited Company will likely exceed the benefits.

But if you are married or in a civil partnership and one of you is a basic rate taxpayer (or even below the tax threshold altogether) and your small portfolio of Buy To Let properties is held in joint names there are other tax saving alternatives open to you.

It is possible, by structuring your affairs correctly, to share the allocation of net rents between yourself and your partner or spouse in unequal shares.

By doing this, more of the taxable income is shifted to the partner who pays the lowest rate of tax which can often result in a substantial saving on the overall combined tax bill of the family unit.

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At THP we have already done this successfully a good number of times and have now created a system together with a good number of template forms which we know will be accepted as valid by HMRC.

So whether you are in the process of buying a Buy To Let property now and you think this could apply to you or you simply want to put a more tax efficient solution in place before the start of the next tax year, please give us a call.

Our team of BTL property tax experts are just waiting to help and advise you on how to reduce the additional tax bills on your BTL lettings with the minimum of hassle and without it costing you a fortune.

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