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What the April 2018 tax changes mean for your property

Written by: Paloma Kubiak
Keep up to date with the new rules and how they will impact the money in your pocket
What the April 2018 tax changes mean for your property

Now we are in the 2018/19 tax year, a number of key changes have taken place to existing policies while some new initiatives also come into effect.

Here’s what the changes mean for your home or rental properties:

Council Tax: Local councils in England have been given the authority to raise council tax by up to 5.99%, adding more than £100 to the average property’s bill in April.

Personal Allowance: The amount of money you can earn before you start paying income tax will rise with inflation from the current level of £11,500 to £11,850.

Higher rate threshold: For higher rate taxpayers, the threshold will rise from £45,000 to £46,350 in the new tax year. The government has already committed to raising the higher rate threshold to £50,000 by 2020.

Capital Gains Tax: CGT is charged on the profits made when certain assets are sold or transferred. If all gains in a tax year fall within the annual CGT allowance (£11,300 for 2017/18, £11,700 for 2018/19) there is no tax to pay.

Energy Performance Certificates: As of 1 April, all buildings within the scope of Minimum Energy Efficiency Standards (MEES) must have a minimum Energy Performance Certificate (EPC) rating of E, or they will be illegal to rent out. Landlords face fines of up to £4,000 if they don’t meet the grade.

Residence nil rate band: The current inheritance tax nil-rate band is £325,000 but married couples and civil partners can pass this on to the surviving spouse meaning there’s no IHT to pay on the first £650,000. But spouses also get an extra allowance – the residence nil rate band – of £125,000 in the 2018/19 tax year where a main residence is passed to a direct descendant.

Mortgage interest: Last year, landlords could deduct their full mortgage interest costs from their income when calculating their tax bill. Now, landlords are only able to offset 75% of their mortgage interest. In the 2018/19 tax year, this figure will drop to 50%.

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