Buy to let property can be a great investment – it can provide an ongoing income and an asset that should go up in capital value.


However, more and more buy to let landlords are being affected by tax.

If you own a property personally (not as a business) then all income from rent, as well as salary income, is subject to income tax, which should declared through self-assessment. 

For those on high salaries it could mean that all rental income is subject to tax at 40%. 

Combine this with the capital gains tax on second properties when selling them, as well as the tax relief on mortgage interest being reduced. 



However… there are investments that you can make, to reduce your income tax bill


One of these is a Venture Capital Trust, or VCT. These are tax saving investments, where you will get 30% of the amount invested back as tax saving. SO, if you invested £10,000 into a VCT, you would get back £3,000 removed from your tax bill. 

This means £3,000 goes into your pocket, rather than to the taxman!

Call today on 01793 686393 to talk to an adviser to start paying less tax!

Here’s how a VCT could work for you as a buy to let landlord:

If you personally own a buy to let property and you have a full time job, the income you receive from both is subject to tax. 

Say for this year, you have a total tax bill of £12,000. You could reduce your tax bill to £0, if you invested £40,000 into a VCT. 

This would give you £12,000 back, immediately, and then at the end of 5 years, you should get your £40,000 back too.

You would also get tax free dividends over the next 5 years – something that is particularly beneficial for higher and additional rate tax payers.  

For more details and information, see Income Tax and VCTs

The rules are a bit different if you own Buy to Let property through a business, see Company Owners and VCTs to see how you can take money out of your business without tax to pay. 

If you are thinking of selling a property and want to avoid capital gains tax, see Buy to Let and Capital Gains Tax.


If you are a buy to let landlord and want advice on how to reduce your tax, or have a question, or even just want to have a chat about reducing you tax liability with a UK Qualified Independent Financial Adviser, then phone now on 01793 686393 or contact us online.