The Office of Tax Simplification (OTS) has published 'Property Income Review Scoping Document', this review aims to identify opportunities to simplify the taxation and administration of individuals, partnerships and micro-companies that receive residential rental income.

It will consider:

  • The position and characteristics of the taxation of property income when compared to other sources of income.
  • The different ways in which property income is taxed.
  • The factors that influence taxpayer choice between the Cash and accruals basis.
  • Available reliefs and whether they achieve the intentions of the policy.
  • Identifying difficulties taxpayers face in becoming or ceasing to be a landlord.
  • The administrative burden on intermediaries.
  • The regulatory considerations of property ownership.
  • The use of third party information to assist taxpayers.
  • Issues in relation to reporting under Making Tax Digital.

Editorial comment

A review of our subscriber guide Buy-to-let ownership: personal v. company? reveals how horribly complicated property taxation has become, even for seasoned tax advisers. A potential landlord might think that they are asking an adviser a very straightforward question when they ask, 'What is the difference between being a landlord as an individial or a company'? Read our guide and consider your response.

Useful guides on this topic

Adviser’s Guide: Property Business, profits and losses
TOP RATED Guide: What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is NI paid on property income? Is property income classed as a business activity?

Buy-to-let ownership: personal v. company? (Subscribers)
TOP RATED Guide: What is the most tax-efficient option to own buy-to-let property? Personally or via a company? What are the income Tax, Corporation Tax, CGT, IHT, ATED, SDLT, or VAT issues? With tips on profit extraction and other planning points, case studies and links to further guidance.

Making Tax Digital (MTD)
A link to our MTD guides

Cash basis for property businesses
When should landlords use the cash basis? How are profits calculated? Is there an alternative? 

External Links

Office of Tax Simplification – Property Income Review Scoping Document

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