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Budget 2021 & Tax Day: Landlord Summary

Originally published at: Budget 2021 & Tax Day: Landlord Summary | OpenRent Landlord Hub

Here’s a landlord perspective on the announcements made by UK Chancellor Rishi Sunak as part of his Budget and upcoming ‘Tax Day’ announcements in March 2021. Budget Tax Announcements for Landlords The English stamp duty holiday has been extended to 30 June. From 1 July, the residential rate of Stamp Duty will apply only to…

Just couple of quick clarifications…

The increase in corporation tax will by no means affect all landlords letting through a limited company.

The 25% rate will apply only to companies with taxable profits over £250,000.

For companies with taxable profits of less than £50,000, the tax rate will remain at 19%.

For those with profits between £50,000 and £250,000, the official tax rate will be 25% but there will be marginal relief such that the tax rate ramps up from 19% to 25% over the £200,000 profit band (which means that profits between £50,000 and £250,000 are effectively taxed at 26.5%).

So, for example, if your profit is £100,000, your total tax due will be £22,750, an effective rate of 22.75%.

Also, on business rates, the holiday only applies (and has ever applied) to those in retail, leisure and hospitality.

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Not touched on here at all is the effect on future btl mortgage applications on people who have taken any govt COVID support.