Landlords feeling the pinch
Landlords are starting to feel the impact of recent tax changes in the payments that they are due to make to HMRC on 31st January this year.
The removal of the 10% wear and tear allowance came into effect for the first time in the 2016/17 tax year, the final payments for which period are now falling due.
This change is expected to raise an additional £205m for the exchequer in the first year following its introduction.
The removal of this relief is one of a number of significant reforms impacting on the private rented sector, the largest of which is the restriction of the deductibility of interest against rental income, which was introduced with effect from April 2017 and is being phased in over a four year period.
The impact of this measure is estimated by the treasury to cost landlords more than £665m annually by 2020 and will have a significant impact on how landlords choose to finance and structure their residential investments.
For more information or help with your UK property tax affairs, contact Paul Windsor