Save tax on your buy to lets – advice for married couples

Since April 2020 mortgage interest higher rate relief on Buy To Let property has been entirely phased out. This means that the majority of private Landlords in the UK now have much higher tax bills, making the Buy To Let dream far less attractive. But there are still ways to save tax on your buy to lets.

In a previous blog, we took a look at 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 we would suggest that you really need to be a Landlord with a good number of actively managed properties (say 10+) valued at around or above £2m. You can find out more about that on our special pages for Buy To Let Landlords here.

The majority of Landlords, however, some labelled as “accidental”, do not fulfil this criteria and for them, the potential costs involved in transferring their let properties 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) 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.

For More Information on Tax Saving Solutions Contact THP Today

At THP we have already helped a good number of couples with this and have now created a system together with a good number of template forms that 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.

Visit the special section of our website for Buy To Let Landlords here to find out more.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    Avatar for Ian Henman
    About Ian Henman

    London lad Ian joined THP in October 2016 to set up and manage THP’s new legal services department.

    Starting at the tender age of 19 Ian spent almost 30 years building his career at Natwest/RBS becoming a business client account manager to many local businesses.

    Ian was looking for a new challenge and as THP was searching for someone to gain accreditations and spearhead the legal services department, there was a clear synergy.

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