In the 2015 Budget and today's Autumn Statement, the Chancellor has declared war on the buy-to-let landlord and the unwary expatriate who is letting out a former home in the UK.
The first major change is in the way tax relief is granted on let property. It will no longer be a deduction from income, resulting in a lower taxable profit. From April 2017, the interest paid on a property loan or mortgage will be used as a tax reduction and the relief will be restricted to the basic rate of tax ie 20%.
Secondly, as announced today, the rate of Stamp Duty ( known as SDLT) will increase on buy-to-let properties and it is expected that this will be set at 3% above the standard rates of SDLT.
Thirdly, it is proposed that by 2020 the sale of a residential property must be reported to HMRC within 30 days of completion, and the capital gains tax paid by this date. This is very similar to the regime in existence since April 2015 for non-resident landlords selling UK residential property. It is not proposed that this regime will apply to residential property attracting main residence relief.
And finally, the Chancellor has announced that in 2020 it is expected that rental businesses (along with most business and the self-employed), will be required to report their results quarterly instead of annually, potentially necessitating professional assistance four times per year, instead of once!