Tax savings boost for buy-to-let investors

Landlords in the buy-to-let market will be the winners with the income tax
cuts that have been dished out by Gordon Brown in his
2007 Budget.

Wealthier landlords stand to benefit from cuts from at least £1500 a year,
while well-off retired people topping up pensions with rental income could see
similar-sized tax benefits, the FT reported.

Grant Thornton senior tax partner Mike Warburton said this was unexpected of
the chancellor.

‘This apparent favouring of unearned income in the Budget could be seen as
perverse,’ said Warburton.

Landlords will also not be subject to national insurance since income from
buy-to-let properties as well as other
pensions and investments are exempt from
this levy.

‘The great majority of buy-to-letters are deemed to have rental rather than
traditional businesses so NI doesn’t arise,’ said PwC tax partner John Whiting.

Further reading:

Income tax reforms ‘will hit low earners’

IMF warns Brown not to raise taxes in Budget

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