The Government has recently announced changes relating to buy-to-let properties which will affect the tax position of this type of investment.
Firstly, and already in place, landlords purchasing additional buy-to-lets will pay higher rates of Stamp Duty Land Tax. Secondly, tax relief on mortgage interest will reduce from 2017 and be capped at 20% from April 2020. For investors with highly leveraged buy-to-let portfolios, the incentive to incorporate and therefore reduce taxation is very convincing.
Incorporating would involve forming a new company that could accept a transfer of assets from the holder of the property portfolio. There are lots of matters to consider should you wish to go through the incorporation process including the allotment of shares, the tenancy deposit scheme and the statutory filing requirements at Companies House.
For advice on the changes to buy-let-properties and how it may impact on you, please contact firstname.lastname@example.org or call 0114 267 0911.