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For the use of mortgage intermediaries & other professionals only

Income and Tax

Your clients' main source of Buy to Let (BTL) income will be rent. It is vitally important that they get a true sense of likely rental levels by speaking to local estate agents and generally researching the local rental market.

Most landlords will also be interested in the potential resale value of their BTL property. So the local market, transport links, schools etc. may also be important considerations.

Rental income and tax

Clients will have to declare rental income on their tax return so they should keep a record of rental payments received and any associated expenditure for the rental property. As a result of tax legislation which will begin to take effect in 2017 and be fully implemented by 2020, finance costs will not be tax deductible but tax relief can be claimed at the basic rate. An accountant will be able to ensure that HMRC is properly advised and all allowable expenses and allowances are correctly identified.

Sale proceeds and tax

The proceeds from the sale of a BTL property are subject to capital gains tax. Calculating this tax liability can be quite complicated and clients should take expert advice from a qualified accountant.

For the use of mortgage intermediaries & other professionals only

If you do not have professional experience, you should not rely on the information contained on this site. If you are a professional and you reproduce any part of the information contained on this site, to be used with or to advise private clients, you must ensure it conforms to the Financial Conduct Authority's advising and selling rules. These pages are for the use of those people who are resident and ordinarily resident in the UK and should not be regarded as an offer or invitation to sell Mortgage products in any jurisdiction other than the UK.

Birmingham Midshires is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office; The Mound, Edinburgh, EH1 1YZ

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