Accidental landlords at risk of tax increases

Due to the measures announced last year, whereby the Government plans to restrict the mortgage interest relief for those who let out residential properties, accidental landlords could be at risk of a tax bill!

You may be an accidental landlord if:

1.       You have inherited a home with sitting tenants or one that you can’t sell.

2.       You have moved to a new home (perhaps one with a partner) and are letting out your previous home.

3.       You have helped a family member buy an investment property by taking the mortgage on in your own name.

Many accidental landlords may not be aware of need to report rental income to HMRC on a Tax Return let alone the upcoming restriction to interest relief ( and should take advice from us in respect of their affairs as they may find themselves with a large income tax bill and possible penalties.

There may be opportunities to reduce tax by:

a.       Ensuring that you have claimed all of the expenses that you are entitled to claim.

b.      By declaring the rental income, even if you have made a loss as the loss can be used to offset future profits.

c.       Moving ownership of the property between spouses.

If you wish to speak to a member of our tax team, then for Darlington call Alan Moore, Lee Watson or Alison Welch (01325 349700), for Durham call Nicola Bellerby or Alison Welch (0191 384 2244) and for York call Alan Moore or Graham Richardson (01904 784400).