5 tips on how Landlords can become more tax efficient

5 tips on how Landlords can become more tax efficient

As a landlord, a key area that you need to be shrewd about is how you can become more tax efficient. Here are 5 tips on how you can be just that:

  1. Be aware of what expenses you can offset against your tax. Speak to your accountant about what expenses are valid and make sure you religiously keep receipts. Typical expenses include business and contents insurance, letting agents’ fees, ground rents and services charges, accountant’s fees, and travel costs etc.
  2. Transfer your assets to your spouse. You can potentially cut your tax bill by utilising your spouse’s capital gains allowance. And if their earnings also fall into a lower tax bracket, you could end up paying less tax on the rental profits.
  3. If you’re looking to sell your rental property, make sure you claim all the relief that is available to you. If you own more than one property then it often makes sense to sell one property in each tax year so that you can take advantage of the 0% Capital Gains Tax band up to £11,300.
  4. It can often be more efficient to manage your property portfolio through a limited company. Effectively, the limited company you set up acts as a letting agent and all finance costs can be offset against your profits. Speak to your accountant to see if this is a good way forward for you, every case is different.
  5. It many sound obvious but simply look at re-mortgaging your portfolio. Buy-to-let mortgage interest rates have fallen over the years so if you took yours out a while ago, the chances are that you could get a better deal now and save some money.