Adrian Moloney

Kent Reliance and EY launch tax guide for brokers

Kent Reliance for Intermediaries and EY have worked together to produce a guide for broker partners on the changes to the UK tax system.

‘Changes to UK Tax Relief on Finance Costs’ has been complied to inform intermediaries on landlords’ key considerations.

The guide looks at the introduction of restrictions to income tax relief on 6th April 2017, which has severely impacted landlords’ ability to make profit on their portfolios.

Prior to this date, landlords had been able to deduct 100% of their home finance costs from their rental income to calculate the taxable rental profit.

These restrictions have been phased in and, for the tax year 2020/2021, there is no allowable deduction for finance costs at all.

The guide also outlines each tax a landlord should be aware of prior to purchasing, transferring into a company structure, or when selling an investment property.

Adrian Moloney, group sales director at OneSavings Bank (pictured above), said: “Our broker partners have told us that even though Covid-19 has impacted the purchase or remortgage activity of their clients, professional landlords are not standing idle.  

“Many are taking advantage of the current situation to re-evaluate their investments, in order to maximise opportunities when normality returns. 

“The latest edition of our ‘Changes to UK Tax Relief on Finance Costs’ for BTL owners, informs our broker partners of the key considerations facing their clients regarding the tax changes. 

“It is our hope that this guide will be a source of information for landlords and brokers about their portfolios, but of course this shouldn’t be seen as a substitute for professional advice. 

“We always recommend to our broker partners that they advise clients to seek advice from an accountant or tax adviser to ensure they are fully aware of their portfolio’s tax liability.”  

Martin Portnoy, partner at EY, commented: “Whether you hold an interest in UK property for personal use, as part of a property business or for investment purposes, the UK taxation landscape can be challenging. 

“Professional advice is essential and can add great value.”

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