Kent Reliance

Kent Reliance and EY launch educational BTL tax guide for brokers

Kent Reliance for Intermediaries has worked together with EY to produce an educational guide for brokers which highlights the tax issues affecting the BTL market, following the rule updates to the UK tax system.

The ‘UK Tax Relief on Finance Costs’ guide was compiled to inform intermediaries on the key considerations faced by their landlord clients and how they run their rental portfolios.

The guide includes a summary of the current tax rules and who these changes are affecting, as well as the key implications for landlords.

Some of the topics discussed in the document include the shift towards properties being purchased within a limited company SPV, or landlords moving properties from personal names into a limited company — the guide aims to help brokers understand the tax implications and the reasons why some landlords may want to move from personal ownership into a limited company structure.

The guide also explains in more detail why some properties owners may want to set up a new limited company SPV, with the shareholders remaining the same in both companies and an intercompany loan facilitated for the deposit.

Roger Morris, group lending engagement director at OSB Group (pictured above), said: “It was the summer budget statement made by George Osbourne in June 2015 that transformed the BTL sector. 

“Since that time, we’ve seen a significant amount of legislation impacting everything, from stamp duty to interest relief and, more recently, EPC requirements, all of which have accumulated in an increase in professionalism and quality within the BTL sector.”

“This well-constructed and informative educational guide will help put brokers in a well-informed and educated position, as we know that professional landlords are not standing idle — many are taking advantage of the current situation to re-evaluate their investments in order to maximise opportunities as normality returns.” 

“While this guide is a valuable source of information for brokers, it 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 a professional tax adviser to ensure they are fully aware of their portfolio’s tax liability.”  

Jodie Cummings-Barker, tax manager at EY, added: “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.

“As echoed by Roger, seeking professional taxation advice, especially for portfolio landlords, is absolutely essential and can not only add great value, but is an important consideration for future planning.”

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