Property Portfolios and Buy to Let

Income arising from investment in property portfolios by sole traders or partnerships face an increasing tax burden because of the interest relief restriction.

We advise on the options available including mitigation of capital gains tax and IHT. changes in deductibility of interest costs for Sole Traders, Partnerships and LLPs that came into play in April 2017 have caused some furore in the market with a marked impact on enthusiasm in investing in Buy-to-Let properties.

The effect on profitably and tax cost for higher rate tax payers will increase over the next four years until by 2021 those with high levels of gearing (loan to value) could find that the interest and tax cost reduces their net rental income to nil!

There are, of course, some ways that this undesirable position can be resolved.

Consideration is given to:

  • The opportunity to incorporate without incurring any tax charges specifically
    • CGT
    • SDLT
  • The impact of funding on any planning
  • Inheritance Tax mitigation opportunities

For further information please contact us.