How Landlords Work 149 Days a Year for the Tax Man
By Simon Thompson
Student landlords can celebrate tax freedom day on May 29 - the day when they stop filling the taxman’s bank account with cash in favour of their own pockets.
The reality is landlords work for 149 days or 41% of the year to pay their tax - but they could still save money if they reorganised their finances.
UK taxpayers - including landlords and property developers - waste £13.5 billion in tax, yet 88% could take action to slash their bills but just do not bother.
The other bad news is tax freedom day is nudging later in to the year. Last year, it was May 27.
Tax experts reckon the average tax saving per taxpayer could add up to as much as £4,400 by taking some simple steps.
The biggest areas for tax saving for landlords are:
Income tax - Many husbands and wife investors could restructure their portfolios to give a more tax-effective ownership and shift higher rate tax (40% plus) from one owner to lower rate tax (20%) paid by the other.
Income shifting between spouses is quick and easy and can save thousands in tax.
Inheritance Tax - basic inheritance tax (IHT) planning could save £1.3 billion in wasted payments
Capital gains tax (CGT) - A knock-on benefit from income shifting. Tax effective property ownership also reduces CGT bills.
Karen Barrett, chief executive of independent financial web site unbiased.co.uk said: “With so many of us admitting to doing nothing at all to tackle our tax waste mountain, it is not surprising that tax freedom day ends up being later every year.
“Sorting out your tax can be a quick and simple, so go through your finances and your individual circumstances to see whether there are any areas where you are currently not being tax efficient or where you could claim tax back from the government.
Financial think tank the Adam Smith Institute calculates tax freedom day each year.
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