In this video, we delve into the significant tax hits landlords in the UK have experienced since 2015, enforced by HM Revenue & Customs (HMRC). From the phased reduction of mortgage interest relief to the stamp duty land tax surcharge on additional residential properties, we cover the crucial updates that every landlord should be aware of. Learn about changes to wear and tear allowances, capital gains tax, and income tax implications, and stay informed to navigate the evolving tax landscape effectively.

Phased Reduction of Mortgage Interest Relief: One of the most significant changes for landlords has been the phased reduction in mortgage interest relief. Prior to April 2017, landlords could deduct mortgage interest payments from their rental income before calculating their tax liability. However, this relief is being gradually reduced and replaced with a basic rate tax reduction, meaning landlords can no longer deduct all of their mortgage interest from their rental income before calculating tax.

Stamp Duty Land Tax (SDLT) Surcharge: Since April 2016, an additional 3% stamp duty land tax surcharge has been applied to the purchase of additional residential properties, including buytolet properties and second homes.

Capital Gains Tax Changes: Changes to capital gains tax were introduced in April 2015, including the removal of the final period exemption for capital gains tax relief on the sale of a main residence and the reduction of the time limit for reporting and paying capital gains tax from 31st January following the end of the tax year to 30 days.

Replacement of the Wear and Tear Allowance with a Replacement Furniture Relief: As of April 2016, the previous wear and tear allowance was replaced with a new relief that allows landlords of residential properties to deduct the cost of replacing furnishings in the tax year they are incurred.

Changes to Capital Gains Tax for NonResidents: From April 2015, nonUK residents are required to pay capital gains tax on the disposal of UK residential property.

Restrictions on Letting Relief: As of April 2020, the availability of Letting Relief has been significantly restricted. Letting Relief can now only be claimed if the landlord is in shared occupancy with the tenant.

Income Tax Changes for Landlords: Changes to the tax bands and personal allowances could affect landlords' tax liabilities, as they would for any taxpayer.

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