Accounting and
Taxes on Buy To Lets
There are a number of tax liabilities you will be faced with when
investing and renting, hence the need for good Buy to Let
property tax advice. The tax liabilities you will come across as you buy, renovate, sell
and /or rent out properties
- Stamp Duty
-
Income Tax,
-
Capital Gains Tax (CGT)
-
Inheritance tax.
Seeking out a professional tax accountant who has experience with Buy to let property
tax advice is essential to mitigate the various tax liabilities. The accountant/ appointed tax advisor will
ensure all allowable expenses are deducted against your rental income from your
Buy to Let property when calculating your annual buy to let
property tax bill. If you are selling your Buy to Let
property you need to be thinking about Capital Gains Tax. There
are significant exemptions available for Capital Gains Tax mitigation and
timing of the asset disposal can also result in considerable savings of capital
gains tax. The appointed accountant / tax advisor will we prepare your capital
gains tax computations, making sure all your entitlements of claims to reliefs
and exemptions are made.
Whether you’re buying, selling, renting or leaving it in a will, an
Investment (Buy to Let) property it will be subject to taxation:
Stamp duty Tax – This tax
is payable when you purchase a BTL property the percentage of tax payable
depends on the value of the property
Income Tax – This tax is
charged on all rental income after allowable expenses are deducted. The amount
of tax paid is also dependent on the income tax band you are in. This must be
declared on your annual Self-Assessment Tax Return under the BTL property tax section.
Capital Gains
Tax -
Capital Gains Tax is chargeable on the gain you made when selling a Buy to Let
property. The amount of Capital Gains Tax payable is calculated depending on
the length of time you owned the property, whether you lived in it and certain
deductible expense incurred when you purchased and sold the property such as
legal fees etc
Inheritance Tax – If your
estate exceeds the nil rate band for inheritance tax is payable.
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