5 things landlords need to know

1. Keep on top of your records

Keeping accurate and reliable records of your property income and expenses is key. It'll allow you to monitor how your property business is performing, and ensure you're keeping your profits in mind.

Using cloud software means you can update your accounting records from anywhere, even on your mobile phone. This means that you can monitor your profits and track expenses and ensure your property business thrives. 

Reliable records also enable your accountant to prepare your self-assessment tax return smoothly and claim all allowable expenses against your income.  

2. Stay up to date with the tax rules

Tax rules and legislation are always changing. Your accountant will stay up to date with these changes to ensure you are meeting your obligations.

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) comes in to force from April 2026. From this date, landlords earning over £50,000 from property must keep digital records and send quarterly reports to HM Revenue & Customs (HMRC). Landlords with property income exceeding £30,000 will need to meet Making Tax Digital requirements from April 2027, and those with property income exceeding £20,000 will need to meet MTD in due course. 

3. Think about your business structure

Most properties are owned by individuals, and some landlords prefer to hold properties through a company. There may be tax benefits to this arrangement, but that is not always the case so it's important to seek financial advice. Always plan and discuss any strutural changes with your accountant before you make any decisions. Your accountant can work with you to build a long-term plan in connection with your business goals. 

4. Maximise family allowances

Depending on your circumstances, owning a property with a spouse or civil partner that you live with may be good tax planning. If you consider changing property ownership, make sure you get the transfer of the property handled correctly and discuss tax planning opportunities with your accountant.

5. Report property disposals correctly

UK residents disposing of UK residential property that results in a CGT liability must pay and report Capital Gains Tax (CGT) by 60 days of completion.

Non-UK residents who dispose of UK land and property must report the disposal to HMRC regardless of whether there is tax to pay and also have 60 days from completion to report this to HMRC.

Keeping the following information will be useful when you sell the property, as you will need them to report your Capital Gain:

• a log of capital expenditure 
• evidence of purchase price
• evidence of estate agent, surveyor and legal fees 
• list of key dates, such as the period you lived in the property, the duration it was rented out, and the time it remained empty

How can we help?

At TaxAssist Accountant Waterloo we help many landlords in the same situation as you. We would love to speak to you to help you with your property business. Call us today on 020 7401 8384 or fill out our online enquiry form to arrange a free initial consultation.

Last updated: 26th November 2024