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Letting Residential Property
By Richard Kilburn MSc FCCA | Updated August 27, 2007
Many people are finding themselves as landlords in the present age. This can be a result of a planned approach, such as buying to let, or more accidental through inheritance for example. Many couples marry and live in a single property, having previously had one each and let the remaining property out.
Essentially, letting property creates a taxable income and should be included on your tax return for income tax purposes. If coming to sell the property, there is then the issue of capital gains tax. There are a number of exemptions available dependent upon the circumstances prior to letting. The combination of various options can often result in a substantially reduced tax charge.
The specific tax position of any particular property should be assessed prior to letting, and re-assessed during the period and certainly when coming to sell. Why? Because there will be no (or a reduced) benefit to letting if at the end, and unexpected tax bill wipes out any gains you’ve made.
Topics: Property Investment |
