How does Section 24 affect higher-rate taxpayers?

A higher-rate taxpayer with £10,000 rental profit and £8,000 mortgage interest now pays Income Tax on the full £10,000, then receives a £1,600 tax credit (20% of £8,000). Net tax: £4,000 minus £1,600 = £2,400 on just £2,000 of real profit.

Should I incorporate my buy-to-let portfolio?

Incorporation makes most financial sense for landlords with multiple properties and higher-rate income, where long-term tax savings outweigh the one-off costs of transfer (SDLT, CGT, legal fees). Taxbix models this individually for each client.

Do I need to complete a Self Assessment for rental income?

Yes, if your total rental income exceeds £1,000 per year. You must register for Self Assessment, declare rental income, and pay Income Tax on profit after deducting allowable expenses.

What CGT rate do I pay when selling a buy-to-let?

From October 2024, CGT on residential property is 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. CGT must be reported and paid within 60 days of the sale completing.

Property & Landlord Accounting

Buy-to-Let Accountant UK

Section 24 - the restriction on mortgage interest relief for individual landlords - has fundamentally changed the economics of buy-to-let in the UK. Many landlords are now paying more tax than they realise, or less than they should. Taxbix provides specialist BTL accounting.

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Section 24: How It Affects You

Since April 2020, individual landlords can no longer deduct mortgage interest payments from rental income before calculating tax. Instead, you receive a basic-rate tax credit (20%) on mortgage interest. For higher-rate taxpayers, this effectively means paying tax on money that went straight to your mortgage lender. Taxbix calculates your exact Section 24 position and plans around it.

Ltd Company Buy-to-Let: Is It Right for You?

Holding rental properties through a Ltd company allows full mortgage interest deduction as a business expense and Corporation Tax at 19-25% rather than Income Tax at up to 45%. However, transferring existing properties from personal to company ownership triggers Stamp Duty and Capital Gains Tax - so timing matters significantly. Taxbix models both scenarios before you make the switch.

Capital Gains Tax on Rental Properties

When you sell a buy-to-let property, CGT applies to the gain above your £3,000 annual exempt amount. Basic-rate taxpayers pay 18% CGT on residential property; higher-rate taxpayers pay 24% (from October 2024). CGT on property must be reported and paid within 60 days of completion. Taxbix prepares the CGT return and advises on reliefs available.

Allowable Expenses for BTL Landlords

Landlords can deduct: letting agent fees, maintenance and repairs, insurance, accountancy and legal fees, ground rent and service charges. Note that major improvements (replacing an old kitchen with a significantly better one) are capital expenditure - not revenue expenses deductible against rental income. Taxbix classifies all expenditure correctly.

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