In this brand new Property Education video, Simon Zutshi shares further information about a HMRC Tax Warning issued to UK Landlords.
Why should we learn more about this HMRC Issue Warning For UK Landlords?
The discussions regarding Hybrid Company Structures and Spotlight 63 have sparked responses from a lot of people, however some of these are completely wrong. This is why it is important to be careful who you listen to on Social Media and always seek Tax Advice directly from a Tax Professional.
What problems are Buy to Let Property Landlords facing due to Section 24?
Simon goes on to elaborate on why we should also familiarize ourselves with the subject of Tax Avoidance vs Tax Evasion. Tax Evasion Schemes and loopholes are generally shut down directly by the HMRC.
Section 24 Property Tax changes mean that property investors can no longer offset all of the Mortgage Interest on their buy to let property against their rental income, other than a 20% Marginal Tax Relief. This means, if you own buy to let property in your own name, and you have a buy to let mortgage, and you are a higher rate tax payer, you will pay more tax on your Buy to let property.
The recent Interest Rate Hikes is one of the reasons why Landlords Selling Up or resorting to Buying Property In a Company Structure instead. Property Strategies such as Rent to Rent (R2R), Lease Option Agreements and Serviced Accommodation (SA), as they are not affected by Section 24 property tax changes.
Simon mentions Dan Neidle who wrote a blog which made some claims about Property 118 and Less Tax For Landlords - which are not correct. You need to be crateful who you listen to when it come to Property Training especially in a Falling Housing Market.
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