The tax year end brings around plenty to think about for landlords. Here are some things to work on…

I got a nudge from a reader in the week about year end planning. Spot on timing wise as we all have a couple of weeks to get things in place.

Landlords are just like anyone else. There are things that apply to all taxpayers and some that apply specifically to landlords. Let have a look to see what we need to consider.

Refurbs

If you are planning spend then generally the timing of the spend is a good thing to consider. If your liabilities are higher this year than next year maybe bring the spend forward. If your income will be higher next year maybe delay. All within reason of course. After all refurbs generally happen when they need to.

It might also be that your tax rates are the same both years but paying less tax sooner is better than later.

Allocation of Income / Income Equalisation

The end of a tax year is a good time to look at the income of couples to see if there is a disparity. Usually if one has much more income that the other it will mean different tax rates. Moving assets and income around is a good way to minimise this. Don’t forget you cannot simply decide this – you have to actually move the asset or income.

ISA Allowances

These are refreshed each tax year. If you have not used your allowance this year you have a couple of weeks to get it done.

Pension contributions

Pension contributions get tax relief in the year of payment. If you are planning on paying then much like the refurb point you might want to consider the timing of the payments.

Charitable donations

Making charitable donations can also be an effective pre-year end planning tool to decrease the years income tax payable. Yes you lose the income you give away but the tax relief could be handy for those already planning on giving money for good.

Capital Gains Tax

We all get an allowance of gains that are tax free. It’s not a huge threshold these days but still, you can make a gain of up to £3,000 without paying capital gains tax. If you are planning to sell an asset at a gain it could be worth considering the timing. If you are selling two properties for instance getting one over the line before the tax year end and one after could save you a little CGT.

Same goes with shares. If you have a large portfolio that has gains within it you could crystallise some of the gains before 5th April and some after to make sure you use both thresholds.

You can also within reason allocate assets between husband and wife (and civil partners) to be sure to use both allowances in each year.

Bonuses / Dividends

If you have control over the timing of your income in any way (usually where you run your own company) then doing a calculation of your position now, with a few weeks to go, is a good idea. You can then get a feel for the capacity for additional pay/bonuses or dividends to make sure you use your allowances effectively.

Summary

Plenty to think about! If you aren’t sure then reach out!