Buy-to-Let Loopholes

We all want to get the best out of our investments, this is not just confined to the price we pay and the return we get. We also want to make sure we are claiming as many costs back as possible in order to drive that tax bill down.

In this webinar, we are going to offer some tips and tricks on how you can maximize your return when investing in property.

The Cost of COVID-19

Did you make any losses in 2020 due to COVID-19. Did your tenants not pay? Did you have any tenants at all? If you have made losses, it is more than likely that you can carry these forward. So if you have £2,500 of losses last year but £10,000 of gains this year, you can offset these and will therefore only have gains of £7,500 that you are taxed on.

Short Term Lets

This is probably the best way to drive that tax bill down. If you have a successful short term let property, you are set for bumper gains.

First of all, there are certain criteria in order for your property to qualify for a short-term let:-

    • Homes must be furnished
    • Available for 210 days a year
    • Occupied for at least 105 days a year
    • Cannot be occupied by the same tenant for more than 31 days in succession or 155 days in total

So if you meet these points above then we can look at the following;

  • Claiming back capital allowances
  • Claiming back the interest of your mortgage
  • Wear and tear claims
  • All furniture/Appliances
  • Repairs

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Most are unaware that you can claim back little expenses from your investment.

For example, if you travel to and from your property a number of times each year you can claim back for the travel. If you make numerous phone calls associated with your property you can claim these back also.

How about any property magazine subscription you may have? Legal and accountancy costs, advertising and management fees. All of this can be deducted from your gross income, this is something you need to meticulously take notes of. When it comes to paying that tax bill, you are going to look far better if you have this info to hand so you can demonstrate the costs associated with the property.

Now, these may seem trivial but even if these costs total £3-4 a day, you will be well over the £1,000 mark at the end of the year in minor costs alone.

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Take Advantage of the Stamp Duty Relief

It’s your last chance to take advantage of the Stamp Duty relief.

We are not talking about buying a new property, simply moving your existing ones from your personal name to a company name. This will allow you to have all the benefits of putting the property in a company rather than your personal name.

Putting your Property in a Company Name

    • Claiming back interest
    • More control over what tax you pay (corporation or income) which is ideal if you are a higher rate taxpayer
    • Potential inheritance tax savings
    • Furniture
    • Wear and tear
    • You can also put phone bills etc through
    • Potential company cars

The main thing is like any business, you are organised and you document all costs.

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