Britain is a nation obsessed with property but accountants are warning those thinking of investing in the buy-to-let market to beware of changes to the tax system that is about to punish residential landlords. A 4-pronged tax attack has been launched by HMRC as follows:
- Landlords will not be able to offset their mortgage interest against higher rates of tax. This is being phased in over 4 years.
- Landlords operating through companies may now face an Annual Tax on Enveloped Dwellings (ATED) charge.
- A 3% stamp duty surcharge for additional property purchases.
This all suggests that residential property investors may be forced to look to other investments (possibly commercial property) to achieve better returns that are not so heavily taxed.
For more information about how these changes might affect you, please speak with one of our Directors or your own Accountant.