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Residential landlords are continuing to feel the impact of new legislation.
Interest relief restrictions for individual landlords of residential property are still being phased in, reducing the deductibility of finance costs, such as mortgage interest, interest on loans to buy furnishings, or fees incurred taking out or repaying loans or mortgages. Only a proportion is now allowed. For the 2018/19 tax year, the proportion drops to 50%, with 50% given as a basic rate deduction. Further reductions are to come. The restrictions have significant impact on the way landlords are taxed, and may push basic rate taxpayers over the threshold at which they become higher rate taxpayers.
Budget 2018 also brought changes to the capital gains tax (CGT) regime which take effect from April 2020 and may impact someone renting out, and then disposing of, what used to be a main home. Historically, the final 18 months of ownership of a property has attracted a valuable CGT exemption. This will be reduced to nine months. Also from April 2020, CGT lettings relief is no longer available unless the owner shares occupancy with a tenant. We look at this further in 'Tax when you sell your home'.
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The online claims service for the fifth SEISS grant will be open from late July 2021.
Businesses that deferred VAT payments last year have less than a month left to join online and pay in monthly instalments under the VAT Deferral New Payment Scheme.
Freeport operators will be able to take advantage of a zero rate of secondary national insurance contributions (NICs) for employees.