Being a residential landlord or rental property owner is far harder than it used to be. The last year has been difficult as rising interest rates have made mortgages much more expensive so it is harder to make ends meet without increasing rental charges, when renters are already finding it difficult to pay the bills. 
The changes in tax rules have then applied more pressure in the form of interest rate relief reduction, along with the reduction in Capital Gains Tax in April 2023 to £6,000, then reduce further to £3,000 in April 2024. The rental market has become much less profitable and more landlords are re-examining their portfolios and options. 
Buy-to-let and residential property owners who have mortgages on properties are particularly vulnerable if the market value of the property is not much higher than the borrowing. Options available to reduce the impact of the liabilities in the past have been to reduce the debt, sell the property or incorporate the property business. 
If you are thinking of incorporating an existing property business, you should seek advice to understand the implications and the requirements you will need to meet. 
Buy-to-Let Tax Checklist 2023-24 
If you replace any existing furniture or equipment, it can qualify for new replacement furniture relief (RFR). If you sell the replaced item(s) you must deduct the sale proceeds. 
When purchasing a buy-to-let residential property consider allocating a nominal amount for the second-hand furniture left in the property so you can utilise RFR when you replace them, and you could save on Stamp Duty Tax too. 
Consider whether to make a joint property election on purchase with your spouse to vary the split of any rental income so you can utilise allowances and lower tax rates. 
In certain circumstances it may be beneficial to incorporate your property business. However, great care should be taken in planning to see if this is feasible and if stamp duty and CGT on-costs can be legitimately avoided.  
Update your will if you have acquired or disposed of properties since your last will review. 
If there are sound commercial reasons, consider employing family members to assist with managing your property as this can reduce your tax. 
Transferring all or part of property between spouses is generally free of CGT and IHT charges, so this can help to utilise allowances and lower tax rates. Although you should seek advice in case a stamp duty charge is triggered. 
Furnished Holiday Lets Tax Checklist 2023-24 
Furnished Holiday Lets (FHL) are treated as a trade for UK tax purposes, but to ensure you meet the trading tax benefits you should check the following before 5 April 2024. 
Minimum occupancy requirements apply – public lets must be for at least 105 days and the property must be available for at least 210 days in the tax year. Longer lets over 31 days can’t exceed 155 days. 
It is possible to average out the occupancy due to exceptional breaches, but you should seek advice on how to do this. 
As the income is a trading income it is potentially subject to VAT, so if your total income from FHL exceeds £85,000, you would need to be VAT registered. 
There are some tax advantages for FHL: 
You can claim Capital Gains Tax relief for traders. 
You can claim capital allowances for items such as furniture, equipment and fixtures. 
The profits count as earnings for pension purposes. 
For advice about tax please contact us to discuss any queries and how we can assist you in tax planning. It may also be worth looking at the tax advice for individuals 2023-24 as well. 
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