THP’s Platinum MTD Service with FREE Landlord Software

Looking for free MTD compliant landlord software?

A comprehensive package that will help you manage your buy-to-let portfolio?

If the answer is ‘YES!’ then look no further.

As The Landlord’s Accountants, THP has teamed up with Hammock – the Making Tax Digital compliant software made by landlords for landlords.

  • Free MTD Landlord Management Software
  • Your own buy-to-let specialist accountant working for you
  • Access to landlords’ advanced tax planning services
  • Preparation of annual Self-Assessment tax returns for you and your spouse/partner
  • And much, much more…

Currently, growing numbers of buy-to-let landlords are selling up. It’s not hard to see why. No longer able to claim mortgage interest relief, landlords are also being hit by current economic factors such as high inflation and soaring mortgage rates. Then there’s the small matter of government reforms that will abolish Section 21 evictions, limit rent increases and make it difficult for landlords to refuse to allow pets in their properties.

While most landlords are staying, with others rearranging their portfolios to make them more profitable, others are selling up – either to exit the sector or to buy modern properties that comply with up-and-coming changes to energy efficiency rules. If you are one of them and you are selling one or more rental properties, you’ll also need to bear in mind that changes to Capital Gains Tax rules could soon eat further into the profits of the sale.

CGT and selling a rental property – the current situation

If you are selling a rental property that’s not your main residence and you have never lived in it, you pay tax on any capital gains you make over £12,300. (Note that, if you have lived in the property at any point, you can claim certain reliefs).

Higher rate taxpayers pay 28% on gains from residential property. If you pay basic rate tax, you need to make some calculations that take into account your other income, personal allowances and reliefs. If the capital gains don’t push you into the higher rate tax band, you’ll pay 20% on them. Any amount that does push you over into the higher rate is taxed at 28%.

So far, so good. But now comes the bad news.

The 2023 CGT trap

On 5th April 2023 the CGT personal allowance drops to £6,000. That’s less than half what it currently is.

As we’ve previously blogged, this will mean the average CGT bill for basic-rate taxpayer landlords will be £21,187 while higher-rate taxpayers will pay £32,957.

When the allowance drops in April, basic-rate taxpayers will pay £1,134 more. Higher-rate taxpayers will have to shell out an extra £1,764.

(In even worse news, the CGT personal allowance drops to £3,000 in April 2024. You do the sums!)

Selling a rental property before the CGT trap

When you sell a rental property, you have 60 days from the point of the disposal to pay any associated CGT.

What’s important about this is that the ‘point of the disposal’ is the same as the exchange of contracts NOT the date of completion.

So if you are currently in the process of selling a rental property, it can save you a significant amount of money if you exchange contracts on or before 5th April 2023. Remember – this will still give you extra time to complete the sale and hand over the keys.

Are there other ways I can save money?

As the Accountants for Landlords, THP’s expert team can work with you to identify ways of making your portfolio more profitable. Many people also take advantage of our Landlord Platinum Service, which not only offers you free landlord software but opens up other valuable services and expert advice. To learn more, get in touch with our team today.

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 Jon Pryse-Jones
    About Jon Pryse-Jones

    Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

    An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

    Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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