“Restriction of relief has had a material effect on the cash flow position of buy to let rental businesses...”
The introduction of the restriction on relief has had a material effect on the cash flow position of buy to let rental businesses and has led landlords to reconsider the way they choose to run their rental portfolio.
Many buy to let landlords have considered the use of a limited company as a holding structure for their property portfolio. A limited company is not currently subject to the same finance cost restrictions as an individual, and for many landlords UK corporation tax on rental profits can be favourable when compared to UK income tax. As such, in certain circumstances, the use of a company can alleviate some of the tax pressures faced by landlords as a result of legislative change. This is a complex area of taxation and professional advice is essential.
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If I were ever to be invited on Mastermind, buy to let legislation would be my specialist subject (stop yawning, you at the back). I know my Housing Act 1988 from Housing Act 2004, my Section 24 from Article 4 and everything in between.
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