The government has recently introduced an extra 3% in stamp duty for additional residential property and second home owners buying property over £40,000 from 01 April 2016.
If you are moving from your existing main residence into a new main residence within three years then the additional stamp duty may not apply or (if relevant) it can be refunded.
see link below for further information.
Current rules allow mortgage interest paid to be fully deducted from rental profits meaning tax relief is obtained at your marginal rate of tax, 20%, 40% or 45%.
From April 2017 changes to this system are being phased in until fully implemented by 2021. Over the 4 years the tax relief will gradually be limited to a flat rate of 20% tax relief on mortgage interest and this will be treated as a tax reducer rather than being deducted from profits. Those who are already higher rate tax payers or those who are pushed into the higher rate bracket following the add back of mortgage interest to profits will be affected. See link below for further information.
Wear and Tear Allowance - Fully Furnished Lets
From 06 April 2016 for individuals and from 01 April 2016 for companies, the wear and tear allowance of 10% has been abolished for fully furnished lets.
There will be one uniform approach for unfurnished, partly furnished and fully furnished lets called Replacement Furniture Relief. The initial cost of purchasing furniture, furnishings, appliances and kitchenware used in the let is not allowable but the replacement cost is. Any sale proceeds for replaced furniture and any improvement element for the new purchase will be deducted to arrive at the allowable relief applied.
Fixtures integral to the building are considered a repair to the building itself therefore not included in the above and allowed as an expense for example, baths, washbasins, toilets, boilers, fitted kitchens and integrated appliances.
The above does not apply to furnished holiday lettings or commercial property lets as the capital allowances regime is applied instead.
Did you earn less than your husband/wife or civil partner in the year 2015-16 and earn less than £10,600...
If this applies to you and your partner is a basic rate tax payer you can opt to transfer up to £1,060 of your personal allowance to your husband/wife or civil partner. This saves up to £212 of tax.
To make a claim please use the link below and remember to request that the claim is backdated.
For 2016-17 the income limit is £11,000 and the transfer limit is up to £1,100 saving up to £220 of tax
Personal allowance - standard £11,000
Dividend allowance - £5,000 0%
Basic Rate - £5,001 to £32,000 7.5%
Higher rate - £32,001 to £150,000 32.5%
Additional rate - £150,001 and above 38.1%
There is no longer a 10% grossing up of dividends for the tax credit.
If your income is less than £15,600 a year you may be entitled to tax free savings interest. You can reclaim the bank interest tax already paid If you didn't pay tax overall because your income was below the personal allowance before the 6th April 2015 or if you qualify for the tax free savings interest after 6th April 2015.
Personal allowance ye 5 April 2015 (standard) £10,000
Personal allowance ye 5 April 2016 (standard) £10,600
Tax Free Savings Interest £5,000 ye 5 April 2016 (in addition to your personal allowance) .
If you were born before 6 April 1938 or if you get Blind Person's Allowance, Marriage Allowance or Married Couples Allowance it can be more.
To reclaim the overpaid tax you must fill in form R40 (found on our links page) and send it to HM Revenue and Customs (HMRC). You must reclaim within 4 years of the end of the relevant tax year.