Whip your property portfolio into shape - five of the best buy-to-let tips for successful investors - Mazars - United Kingdom

From buying investment properties through an offshore company to splitting your investment income with your partner, there are plenty of ways to make your property portfolio work harder for you.

Head of Property and Construction at Mazars, partner Stacy Eden offers five timely pieces of advice for buy to let landlords looking to secure their investment.

“Although the tax exemptions for landlords have been whittled away for years, it is still possible to make your property portfolio work harder and potentially shave pounds off your property tax bills. For example, by just electing one of your properties as your main residence, you could save thousands in capital gains tax.”

Five of the best tax saving tips:

1. Split ownership to save - Split ownership so that income earned from your property portfolio can be shared with your spouse or civil partner. This maximises after tax income if your spouse or civil partner pays tax at a lower rate than you.
2. Elect a main residence – Your main residence does not have to be the place where you live most of the time, if you make an exemption to treat another residential property as such. The election exempts that property, rather than another, from Capital Gains Tax (CGT) and this could be useful if a sale is anticipated.
3. Offshore business – If you are a non-domiciled individual taxed on a remittance basis, you could consider holding any UK investment properties through an offshore company. This way, income earned by the company from the property is subject only to basic rate income tax and the company will not pay UK tax on any gain made on sale.
4. Delegate refurbishments – It can be difficult for a landlord to obtain tax relief for refurbishment costs, particularly if the expenditure is incurred before a tenant moves in. As a solution, it may be more tax efficient if the tenant carries out the refurbishment work once they move in and is compensated by say a reduced rent or rent free period.
5. Tax benefits for residential lets – Remember that if there has been any period of owner occupation of a let property, up to £40,000 of any gain on the sale of the property generated whilst it has been rented out as a residential let may be exempt from tax. If property ownership is split between spouses or civil partners, both get a tax exemption of up to £40,000, giving a potential total exemption from gains of up to £80,000.

Stacy Eden added: “Mazars is one of most trusted names in advising property entrepreneurs. One conversation with an adviser in any of our offices throughout the UK or beyond could make the difference between the success of your portfolio or failure in an increasingly tough climate.”

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About Mazars:

A jpg image of Stacy Eden is available on request.

Mazars is an international firm specialising in audit, tax and advisory services that operates as an integrated partnership in 50 countries worldwide.

In the UK, Mazars is the eighth largest partnership in terms of audit fee income, has the fastest growing tax practice amongst the Top 20 firms, and was named ‘Large Firm of the Year’ at the Accountancy Age Awards 2008.

The firm employs more than 1,000 people and has over 100 partners based in 17 offices throughout the UK.