Episode 21 - The Ongoing Effects of Section 24 (with Simon Misiewicz of Optimise Accountants)

Ruban Selvanayagam of cash home buyers and auctioneers Property Solvers speaks with Simon Misiewicz of Optimise Accountants on the continued effects of Section 24 of the Finance Act 2015 (which limits mortgage interest relief for buy-to-let landlords). 

 

They discuss the exposure to greater tax liabilities (especially for higher-rate taxpayers), how basic rate taxpayers could still be pushed into a higher tax bracket due to increased rental income, the likelihood of a reversal of the legislation as well as the contiguous challenges landlords are facing (including rising mortgage rates and the difficulty of remortgaging), which has led some to sell properties or incorporate them into limited companies to mitigate tax burdens. 

 

Simon goes on to run through potential strategies, including investing through Limited Companies / Special Purpose Vehicle (SPV) structures and strategically selling less profitable properties. Simon also warns about the risks and uncertainties associated with incorporation relief, emphasising the importance of thorough financial planning and consultation with accountants. The conversation concludes with advice on the importance of regularly reviewing property portfolios and making informed decisions to navigate the evolving landlord tax landscape.

 

#PropertyInvestment #Section24 #TenantTax #LandlordTax #LandlordAccounting #LandlordTaxAdvice #BuyToLetAccounting #BuyToLetTaxAdvice

LINKS (RESOURCES) REFERRED TO IN THE PODCAST

Optimise Accountants

Section 24 (Finance Act 2015) Legislation

Property Solvers' Post on Section 24

RELEVANT LINKS

Property Solvers Investor Profiling

Become an Auction Partner

Property Solvers (Sell House Fast)

Property Solvers (We Buy Any House)

Property Solvers Auctions

Property Auctions News

How to Value Your House

TIMESTAMPS

00:00 - Introduction
00:23 - Explanation and overview of Section 24's impact
04:05 - Section 24's impact on different taxpayers
05:56 - Landlords raising rents and tax implications
07:10 - Government's intent behind Section 24
07:56 - Market consequences of Section 24
08:49 - (Un)likelihood of reversing Section 24
09:43 - Importance of strategic financial planning
11:37 - Challenges with remortgaging and selling
13:01 - Alternative strategies for dealing with Section 24
14:18 - Benefits and complexities of incorporation
17:07 - Implications of incorporation
18:16 - Professional valuations for market value
19:18 - Risks and uncertainties in incorporation relief
20:25 - HMRC scrutiny of incorporation relief
21:47 - Considering incorporation's payback period
22:35 - Analysis needed before incorporating properties
23:01 - Relevance of the "Ramsey" case
25:04 - HMRC's unclear stance on incorporation relief
26:12 - Caution against incorporating portfolios
26:31 - Increasing HMRC scrutiny on landlords
27:32 - Opportunities despite market challenges
28:09 - Building portfolios within limited companies
29:19 - Need for regular strategic investment reviews
30:19 - Adapting to changing economic (and buy-to let investment) conditions
30:59 - Anticipating future tax obligations
32:14 - Optimism for increased rental demand
33:32 - Rising rents and landlord market exit
34:38 - Optimise Accountants' focus on property
35:20 - Contacting Optimise Accountants
36:21 - Work with accountants for tax planning and advice
37:25 - Closing remarks and recommendations