Since our last newsletter, chancellor Rushi Sunak announced the UK Budget.
With no major changes to Capital Gains Tax (CGT) as many landlords feared, the budget in some ways might feel like a let off.
The ‘big news’ story for landlords was of course that Corporation Tax will be increasing to 25% in 2023.
Many landlords that already have limited companies as part of their business structure will see their tax rates increase.
For more on this, a budget summary, market updates and much more keep reading below.
Inside Issue #13
- PRA Changes 5 Years On – Everything you need to know from stress testing to documentation.
- Do you have a burning question about Hybrid Business Models? 58 questions asked at our April live webinar with the opportunity to view the recorded answers.
- 2021 Budget Summary Blog – Why landlords who have incorporated to a limited company (sold their properties to their own limited company) will pay the full 25% on all profits.
- LT4L Live Webinar – Details of how to register for our next webinar on 2nd June.
Budget Summary For Landlords
Many landlords who have incorporated to a limited company (sold their properties to their own limited company) will pay the full 25% on all profits.
Landlords in mixed partnership structures on the other hand may still benefit from the tapered rates providing that the business is considered a trading one by HMRC.
Meanwhile, Landlords with properties in personal names will remain unaffected.
For those that are paying full rate of 25% and drawing out the money as a dividend, they could see a combined tax rate as high as 53.6%.
For a full explanation of the budget including a summary video by Chris Bailey, Co-Founder and Group Director of Less Tax 4 Landlords, please click here.
Articles & Blogs
Do you have a burning question about Hybrid Business Models?
If you’ve had a question about the Hybrid Business Model that’s been playing on your mind, then chances are someone else has already asked it at one of our live events.
Here is a list of 58 questions that got asked at our April webinar. You can also find the video with the recorded answers in the video vault.
In 2016 the Prudential Regulation Authority (PRA) undertook a review of the buy-to-let market and changed the criteria for landlords wanting to borrow money.
Read everything you need to know from Stress Testing to Documentation in our article on PRA Changes: The Impact on Portfolio Landlords.
There’s still time to improve the position of your property business.
It’s possible that we can help turn 2022 – a year that is highly likely to be your worst projected year for cashflow, into your best year yet. Read more about this in our blog and pre-recorded video or you can get in touch straight away by taking a free initial assessment.
Tax Measures Coming into effect at a later date:
- Personal allowances and income tax rate thresholds frozen at 2021/22 levels until the end of 2025/26
- Lifetime Allowance for tax-advantaged pension funds, Inheritance Tax nil rate band and Capital Gains Tax annual exempt amount all frozen at their current levels until the end of 2025/26
- VAT registration threshold fixed at current level of £85,000 until 31 March 2024
- Corporation tax rate on profits over £250,000 to increase to 25% from 1 April 2023, with the current 19% rate applying to profits below £50,000 and a tapering calculation on profits between £50,000 and £250,000
- Establishment of ‘Freeports’ enjoying significant tax breaks announced in 8 areas of England, with further areas to be discussed with devolved administrations
National Landlord Investment Show – Online Super Show
Wed 26th May
Join us on the day where we will be hosting 2 x live seminars and will be answering some of your questions. Register for free now
Hybrid Business Models for Portfolio Landlords
Wed 2nd June
An alternative to selling your property to your own limited company, we’ll see how they work, who they are for (and not for), and why it could be the best option for your business. Register for free now
LT4L and Benham & Reeves Webinar
Tue 22nd June
Join us for a 1 hour collaborative webinar with Benham & Reeves Property Management starting at 10am. We’ll be discussing how we help landlords build, run & grow professional property businesses followed by a 20 minute Q&A session. Register for free now
The Process of Working with LT4L
What can I expect when I complete an assessment?
And what happens after I book in for a business structure consultation?
To help answer these two questions we’ve pulled together videos that will help you understand the process and what is involved in becoming a client and joining the LT4L Client Community.