The mechanism by which landlords receive tax relief for interest and other finance costs is changing from April 2017 … and not for the better. The current rules are more generous than the new rules in that they enable the landlord to receive tax relief at his or her marginal rate of tax.
Lettings relief increases the amount of the gain that is sheltered from capital gains tax when you sell a property which has at some time been your only or main residence, and in respect of which some private residence relief is due.
Many people worry about inheritance tax and, for the majority of people, their home is their most valuable asset. Parents, particularly as they enter their twilight years, may consider giving their home to their children or grandchildren to keep the taxman from getting his hands on it.
For income tax purposes, income from land or property in the UK which is owned by the same person or group of persons is treated as forming a property rental business. Tax is charged by reference to the profits of the business as a whole, rather than by reference to each individual property.
Since 1 April 2016, higher rates of stamp duty land tax apply to purchases of second and subsequent residential properties where the cost of the additional property is over £40,000 (i.e. virtually all properties).
While most people know that you do not have to pay capital gains tax on any profit you make on the sale of your main home, it is generally less well known that you can still benefit for the relief for the final period for which you own the property, even if it is not your main residence at that time.