Tax saving tips for landlords

Tax saving tips for landlords

Taxation is a complex procedure and it’s truly important for a landlord to seek advice from tax consultant and an accountancy advisor. As a landlord, you’ll need to follow a strategy that’s devised to match your specific needs.

Few important buy-to-let taxation tips for the landlords are stated below:

  • While summing up your income from the property for filing a tax return, you must remember to all deposits achieved from new tenants.
  • In order to ensure a lower rate of taxation on the property income, the civil partners (or any married couple) may consider a property transfer from the sole ownership of the partner earning more to the sole ownership of the partner earning less. In case the property gets mortgaged, they may need to pay for the Stamp Duty Land Tax. However, they won’t need to bear any Capital Gains Tax for such a transfer.
  • A property letting business should have a separate bank account. This account needs to be used for paying rents and other associated expenses. Once you keep all personal expenses from property costs, you’ll find it easier to answer questions related to your account figures if ever asked by the tax inspector.
  • Your bank statements ought to be printed on a quarterly or regular basis when you use only online bank accounts. You’ll gain access to your account statements only for a short period of time. Records depicting only the rent payments to such account may be viewed under these statements.
  • Set aside a portion of your profits out of properties and put it in your savings account every month. This way, you’ll have the funds at hand whenever your income tax bill comes. When it comes to meeting your tax dues, you may need to set aside up to 50% of these profits if you gain a substantial amount out of other sources.
  • Where one spouse owns any property to let in Virginia Water, much of his income tax on the yearly profits can be saved after shifting into joint ownership. Likewise, you may even save much on the Capital Gains Tax in the event of a sale. The capital gains exemption can be set against such gains achieved by both spouses during a particular year.
  • Additional tax reliefs can be claimed for lowering the taxable profits when some properties to let in Virginia Water are considered as holiday accommodation and considered for taxation. However, you’ll need to meet certain deadlines while submitting these claims. It’s in your best interest to seek immediate professional advice in this regard.
  • Once the landlord passes away, all of the tenancies have to be taken into account for evaluation of his properties and other assets on the ‘as is basis’. Properties with vacant possession are bound to be sold at a much higher price than that of any property showing a sitting tenant. The inheritance tax to be paid is worth a lower amount if the value is lower at the time of death.

Seek expert VAT advice while dealing with property transactions in a unique way. Even while considering a purchase or lease of commercial property, you must seek expert VAT advice.

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