Under the Rent-a-room Scheme, you can earn up to £7,500 a year tax free if you let out a furnished room, or even a whole floor (but not a separate flat), in your home to a lodger. ‘Woohoo,’ you may say. Yes, but there are a few things to watch out for to keep woohoo from turning into whoops: If … Read More
Buy-to-let tax guide: Five simple ways to be tax efficient
When it comes to buy-to-let income, there are simpler ways than setting up a company to be tax efficient: If you are married, make sure the lower earner owns the rental property – or most of it – to benefit from a lower tax band. You can transfer property between spouses through a simple legal process, without paying any tax. Profit … Read More
Beware the lettings tax clampdown
When you start letting out a property, you have to tell HMRC that you have a new income source from which they can squeeze money. Though they have no automatic way of finding out about this, don’t be tempted to keep schtum. As part of a clampdown on lettings tax evasion, HMRC gets data from estate agents, deposit protection schemes … Read More
Q&A: How can I reduce my buy-to-let tax bill?
Q My husband and I, both in the 40% tax bracket, own our two-bedroom flat in Islington mortgage-free. For commuting reasons, we are about to let it for £1,977 a month and rent in south London for £1,700 a month. We’re confused by all the tax changes for renting. Can we deduct the £200 monthly management fee for the Islington … Read More