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Guide to buy-to-let and taxation

    CPD
    Approx.60min
    Guide to buy-to-let and taxation

    Introduction

    Pension freedoms have made the idea of using a lump-sum or portion of a pension pot to buy an additional property attractive.

    As Stan Russell, retirement specialist at Prudential, says: “The advent of older people opting to buy-to-let-to-retire is an interesting development and, in a post-pension freedoms world, its appeal is understandable.”

    However, the seemingly unstoppable force of buy-to-let has been hit by several taxation changes made by chancellor George Osborne last year, in what he classes as a bid to give more first-time buyers a fighting chance against buy-to-let investors.

    In his Summer Budget 2015, Mr Osborne replaced the wear and tear allowance with a relief that will mean landlords can only deduct the costs they incur on replacing furnishing in residential property.

    He also announced buy-to-let landlords would receive a lower rate of tax relief on mortgage payments.

    This was followed by a 3 per cent stamp duty hike announced in the Autumn Statement on buy-to-let properties, which will come into force next month.

    The 2016 Budget stated the stamp duty hike will be extended to landlords of all portfolio sizes.

    This guide aims to identify how to cope with the coming tax changes, analyse the outlook for buy-to-let investors over the next few years and discuss how advisers can chart a prosperous course for landlord clients.

    Supporting information supplied by: Charles Haresnape, group managing director, mortgages, for Aldermore Group; Andrew Montlake, director at Coreco; Steve Griffiths, head of sales and distribution for Kensington Group; Lee Travis, head of professional development for the Society of Mortgage Professionals; Richard Sexton, director of esurv; the Council of Mortgage Lenders; Naomi Heaton, chief executive of London Central Portfolio; and Jeremy Leach, chief executive of Horizon Asset Management.

    simoney.kyriakou@ft.com

    In this guide

    CPD
    Approx.60min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. How much will the higher stamp duty rates raise to help community-let housing developments?

    2. Until 6 April 2016, how much could landlords claim of the net rent as wear-and-tear?

    3. According to Sue Moore, what was the headline-grabber in the Budget?

    4. What effect would the sale of buy-to-let properties after April 2016 have, says Mr Travis?

    5. Despite considerable press, what does Mr Griffiths say has had little impact on the buy-to-let market?

    6. According to Mr Sexton, what will be a big growth market this year?

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