4 TAX INSIGHTS AND TRENDS LANDLORDS NEED TO KNOW
Here are four insights into the tax trends of the moment that may affect landlords.
1) Capital gains tax threshold changed in April 2023
When a landlord sells a property, they should follow capital gains tax rules. These changed in April 2023. The capital gains tax threshold has now fallen to £6,000, from £12,300. This means that any profits above £6,000 made on the sale of a property will now be subject to capital gains tax. Its worth highlighting that, since 2021, landlords have needed to register the sale of their property for capital gains tax with HMRC within 60 days or risk a fine.
2) New Property portal will potentially help HMRC
Under the Renters (Reform) Bill, the government will launch a new property portal. Whilst no portal currently exists in England, there are similar registers already for private landlords in Scotland and Wales. The portal should help landlords understand their obligations, while giving tenants more insight into their landlords' compliance. As all Landlords will need to be registered it could be used by HMRC to help identify errors in tax entries.
3) You can submit self-assessment tax returns early
Landlords can submit their self-assessment tax returns for the 2022-2023 tax year at any time after 6 April 2023.
HMRC says that the payment date of 31 January stays the same, even if it's submitted early, and it can help landlords understand what they'll owe at the end of the year, to budget more easily.
4) Rental deposit data is helping HMRC with enforcement
HMRC is already using data from deposit schemes (DPS or TDS) to check the tax that should be declared on tax returns. This data is also helping HMRC discover if any landlords aren't declaring rentals. Some landlords may start to receive letters asking them to clarify their tax position. Any Landlord that receives a letter should reply within the time frame outlined - or risk HMRC opening a formal enquiry.