While there haven’t been any recent tax announcements that could affect landlords, there are some changes taking effect this tax year that you should be aware of.
Increase in the personal allowance
The personal allowance has increased for this tax year by £350 – from £11,500 to £11,850 – and the earnings threshold for a zero personal allowance has increased from £123,000 to £123,700. (If you earn between £100,000 and £123,700, the personal allowance decreases by £1 for every £2 you earn and if your income is above £123,700, you don’t get any personal allowance at all.)
New tax bands for Scotland
The Scottish Government has introduced new bands for the coming tax year. There are now five different bands – starter, basic, intermediate, higher and top rates – which not only makes it much more complicated for residents to calculate what they’ll be liable to pay, but also means that those earning more than £33,000 a year will pay more tax than those earning the same amount south of the border. While there is only £70 difference for people on £33,000, if you’re earning £200,000, you’ll pay £2,442.50 more tax in Scotland.
New stamp duty bands for Wales
From April 2018, there are new tax bands for anyone buying in Wales. The UK Stamp Duty Land Tax (SDLT) will now become the Land Transaction Tax (LTT).
As in England if you are buying a second property you will pay an additional 3% LTT.
Increase in capital gains exemption amount
If you’re planning to see an investment property this year, you’ll be pleased to know that the annual amount of gains you can receive tax free has risen from £11,300 in 2017/18 to £11,700 for 2018/19. Above that amount, your profits will be liable to capital gains tax at 18% in the standard tax band and 28% in the higher-rate band.