Restructuring Tax cuts

From this April, new tax rules will take effect, which will see Landlord tax relief gradually cut from marginal rate of income tax to basic rate over the next four years. This means somebody now claiming 40% in tax relief will only be entitled to the basic rate by 2021.

The firm calculated a higher-rate taxpayer would see their returns obliterated once their mortgage interest hits 75% or more of their rental income.

However, there is a way around it: landlords registered as limited companies only pay corporation tax, currently set at 20% and to reduce to 17% in 2020.

“Unless awareness about the changes April will bring is generated immediately, followed by swift action on the part of landlords, the industry is facing something of a crisis.”

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