Call for Evidence on Property Income Tax

Call for Evidence on Property Income Tax

Income from residential property owned by individual landlords is taxed under one of two different regimes.

• The general position is that income tax will be due on the profits from renting out the property, after certain allowable deductions. However, residential property mortgage interest relief is restricted to the basic rate of income tax, and there are no specific capital gains reliefs.
• The Furnished Holiday Lettings (FHLs) regime applies to residential property let on short term lets within certain parameters. The income then attracts some additional reliefs as, for example, mortgage interest is fully deductible and capital allowances are available. In addition, Business Asset Disposal Relief is available on gains made when properties are sold.

The OTS is undertaking a review which will consider the current regimes for the taxation of residential property held by individuals, partnerships and micro companies, and develop recommendations for simplification and ways of addressing distortions.

The ASSC and PASC welcome the opportunity to provide evidence to the Call for Evidence on Property Income Tax by the Office of Tax Simplification.

ASSC PASC UK Submission to the Office of Tax Simplification Call for Evidence on Property Income Tax