Landlords with two or more properties

Whether you’re just beginning to build a portfolio or you’re well on the way to having a serious landlord business, our property tax services will make it easier.

Simon, UKLandlordTax

Hello – I’m Simon.

I’m one of the directors of UK Landlord Tax and I’m a multi-property landlord myself. I know how exciting it can be to start building a portfolio and, at the same time, what a challenge managing several properties can be. Let’s talk – I’d love to help you get as much out of letting property as I do.

 

When the time comes to get serious about property

We offer landlords with multiple flats or houses…

An easy way to keep on top of the tax

Acquiring your first property makes your tax return more complicated. That only multiplies when you take on your second, third, fourth… Letting us handle your tax return instantly solves that problem.

Make you property earn on your behalf

When property becomes more than a side hustle and starts to feel like a real business, you need to make smart moves to avoid tax traps, claim allowances and take up every tax relief you’re entitled to. Our tax planning advice, built on years of experience working with thousands of landlords, will keep your tax bill down and put more money in your pocket.

Support to keep your portfolio growing

If you want to acquire more property, we can advise on where to find sources of finance to fund that investment and how to structure your property business when the income gets really substantial.

Frequently asked questions

Can I set off renovation costs I incurred prior to letting my property out?

A very good question and one which we get asked a lot. In the situation where you buy a property and then carry out renovation works, the tax treatment of expenses such as mortgage interest, utility bills, insurance etc is allowable. The position on the tax treatment of renovation costs pre letting however is more complex. Much depends on the condition of the property when you purchased it. HMRC would argue that if you purchased a run down property you would have paid less for it in the first instance and thus any renovation works carried out would be looked on as capital improvements and therefore not available to set off against rental income. Instead, these costs should be added to the purchase price and included as part of the cost of the property.

It’s a complex area and much depends on the circumstances. Get in touch and we’ll steer you in the right direction.

I have heard that you can split the ownership of a property which is jointly owned and save tax. Is this right?

In certain circumstances, yes. Ownership can vary and before you consider going down this road it would be wise for you to consider the following:-

Types of ownership by individuals (England and Wales only)

Sole ownership
This is where a property is owned in one individual’s name and the income and capital gains are chargeable on that individual. Income and gains cannot be shared with a spouse or civil partner for tax purposes. 

Joint ownership (Joint tenants)
This is where the whole property is owned jointly and if one of the joint owners dies then the property automatically vests with the remaining owners. The interest in a jointly owned property cannot be left in a will until the last survivor becomes sole owner. Because the individuals are entitled to an equal share in the whole of the income and capital gains, they are shared equally and no election can be made for a different split of income. Therefore beware. When buying a property in joint names with friends say, make sure you check with your solicitor that you have common ownership as tenants in common. See below. 

Common ownership (Tenants in common)
This is where effectively a proportion of the property is owned by an individual. This may be equal or it may be in different proportions. If one of the tenants dies then his/her share goes into their estate and is dealt with by the will or according to the rules of intestacy. If the property is owned in different shares and the owners are not married/civil partners then the income and gains are divided in proportion to the ownership. In the case of married couples/civil partners, the income is treated as shared equally (whatever the beneficial ownership) unless they both make a declaration confirming the actual split of income based on the beneficial ownership of the income and the property. The gain would follow the beneficial ownership.

Given The Above Here Is How to save Capital Gains Tax
If one spouse owns a property in their own name, it would be an idea to transfer the property into joint names before a sale assuming that the other spouse has not already used their CGT exemption in the tax year concerned. Care does need to be taken as if this is carried out shortly before a sale, then HM Revenue and Customs may attack the transaction as invalid under anti-avoidance rules. You also need to ensure that any income received in the period after transfer of the property is declared on each spouse’s tax return which may increase the income tax paid. There would also be the costs of conveying the property into joint names.

Can I claim for my time doing DIY renovation and redecoration work?

In short…No. However, the cost of materials is clearly deductible. The cost of travel to the property should also be allowable, provided the only reason for your trip is in respect of the property and its future rental. However, you cannot deduct anything for the time you spend working in the property.

What expenses can I deduct against my rental income?

A very common question to which we have provided a separate detailed article. A must read for any landlord big or small.

Allowable expenses against rental income

Can I let a property to my daughter at a reduced rent?

There is nothing to stop you letting out a property to a connected person or anyone else for that matter at whatever rent you wish to charge. However if you are renting the property at below the market value you cannot set the losses against other rental profits and can only carry the losses forward to set against rental profits earned from the same tenant.

Union Jack icon  Fees for UK residents

Sole owner

Two properties

With two properties, and hopefully some serious rental income, your tax return will be just a bit more complicated.

from

£170

+VAT

Sole owner

Three properties

Once you’ve got three properties on the rental market, there’s more work to do to make sure your tax bill is under control.

from

£180

+VAT

Joint owners

Two properties

Two owners with two properties means two tax returns. This great value package gets the job done for both of you, fast and easy.

from

£280

+VAT

Joint owners

Three properties

If you jointly own three properties with a spouse, partner, relative or friend, we’ll handle both tax returns for one tidy fee.

from

£320

+VAT

joint owners

Four properties

With four more more properties in your portfolio, it’s likely to be time for serious tax strategy. Our experts will work with you to make sure you have the right ownership structure and are taking advantage of available reliefs and allowances to keep your liability under control.

Globe icon  Fees for non-residents

Sole owner

Two properties

With two properties, and hopefully some serious rental income, your tax return will be just a bit more complicated.

from

£190

+VAT

Sole owner

Three properties

Once you’ve got three properties on the rental market, there’s more work to do to make sure your tax bill is under control.

from

£210

+VAT

Joint owners

Two properties

Two owners with two properties means two tax returns. This great value package gets the job done for both of you, fast and easy.

from

£340

+VAT

Joint owners

Three properties

If you jointly own three properties with a spouse, partner, relative or friend, we’ll handle both tax returns for one tidy fee.

from

£380

+VAT

Joint owners

Four properties

With four more more properties in your portfolio, it’s likely to be time for serious tax strategy. Our experts will work with you to make sure you have the right ownership structure and are taking advantage of available reliefs and allowances to keep your liability under control.

Start today

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We can help if you have…

Bought buy-to-let property

You’ve made a conscious choice to purchase property with the intention of renting it, perhaps because you’ve had a positive experience with a first property you inherited or acquired when you moved in with a partner.

Concerns about your tax bill

When property starts to become a serious business, you can’t play it by ear. You have to be methodical, strategic and plan each move or you can let us do a lot of that thinking on your behalf, presenting you with options to make decision-making easy.

Plans to build a business

If you see property being how you make a living in decades to come, it’s never too early to start laying the groundwork. Which business structures will work best? Where can you find finance to invest in your growing property portfolio? And what can you do now to safeguard your long-term legacy?

a man in glasses smiling

What a refreshing experience

“We are overseas and have a property in the UK. We had a stressful time finding a suitable firm to look after our affairs... What a refreshing experience to find a company that was so helpful, so considerate, and took time to listen to our concerns. Nothing was too much trouble for them. They have just completed my tax return and although I had issues trying to find my way around portals and so on, they were magnificent in guiding me through what I considered to be a maze."

A Jones, July 2019

Via FreeIndex, edited for clarity

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Contact our landlord tax experts

Jennie, UKLandlordTax

Talk to one of the team today

Call us now on 01902 711 370
or 0800 907 8633