Tax happens, just deal with it!

Nova Financial, Tony Gimple of Less Tax for Landlords, NLA rep Richard Blanco and Andy Wynne-Jones of Simple Landlord Insurance took on the questions of the moment.

What emerged was fascinating. The overwhelming message was that tax change happens, so just deal with it. The panellists pointed out that buy-to-let is a business so it should be run as a business, taking costs, including tax, into account.

The overwhelming advice was not to set up as a limited company to run your business. Gimple pointed out that this incurs different tax and could be less tax effective when things like corporation tax are taken into account. This was certainly a point that I had not appreciated enough.

Gimple also pointed out that most lenders won’t lend to a limited company and those opting for such a move also need to take into account capital gains tax, dividend tax, income tax and national insurance, while there are implications for inheritance tax.

There were the inevitable opposing views when it came to where to buy in the future.

Blanco, himself a landlord with properties in London, was in favour of landlords in the capital keeping their investment, while Mahoney believes better yields could be found in other cities such as Manchester, Liverpool and Birmingham.

Blanco added that there are parts of London that can still generate good yields. He favours buying properties that are in need of renovation and bringing them up to the highest standard before letting them out as a good rental value. The panel agreed that in the current market quality counts.

While insurance might be seen by some less scrupulous landlords as a cost that should be minimised, the panel pointed