Owing to a recent – and according to PricewaterhouseCoopers (PWC) LLP, widely unnoticed – change in the Inland Revenue’s interpretation and treatment of rental property taxation, there are substantial tax saving opportunities available to the vast majority of buy-to-let investors which could result in increased broker business.
The modifications represent an extension to what constitutes deductible mortgage loan interest with sizeable annual tax savings available to anyone with buy-to-let property(ies) funded by less than 100 per cent mortgage loans and a main home with an outstanding mortgage.
Mark Tuckwell, a specialist in property issues within the private client tax team at PWC LLP, explained that a few key steps would need to be taken to ensure that the tax savings were safeguarded – the first, and most notable, was a remortgage.
By referring a mortgage client to a tax specialist for some specific and immediate tax saving advice, mortgage specialists would also be generating additional work for themselves.
Andy Frankish, managing director at Mortgage Talk, said: “It’s an interesting proposition, the guys at PWC make a lot of sense.
“This has the potential to generate lots of extra revenue for brokers and in the current climate any opportunity should be maximised.”
Tuckwell added: “This provides a fantastic opportunity for mortgage broking and tax advisory industries to work together to create significant levels of extra work for themselves.
“The non-exclusive nature of the planning, the ease of identifying affected clients and the level of ongoing tax savings available make this a strong message to the rental market.”
