Planning for the 50% rate of tax – buy to let investors

The last decade saw the rise of the private buy to let landlord. Many of these properties are jointly owned by spouses or civil partners. Without proper tax advice, the rental income will default to be taxed on the spouses or partners 50:50.

If one spouse or partner has a higher income than the other, this presents an opportunity for tax planning by diverting more of that rental income to the spouse with a lower rate of tax. This balancing exercise can give rise to significant savings opportunities with careful tax planning. This will be of particular importance come 6 April with the introduction of the 50% rate of tax, but is also relevant for those whose income is taxed at 40%.

If you would like some advice on how best to achieve this, please contact Shimon Shaw or James Odds.