Investors turn to loophole to avoid pending tax changes

Investors turn to loophole to avoid pending tax changes

Rising numbers of Britain's landlords are selling properties to themselves using a loophole that enables them to avoid paying more tax.

According to figures published in the Daily Mail, over 60% of landlords are now investing through limited companies as a means of avoiding new tax rules coming into force next year.

The reason for this is the new tax rises on buy-to-let landlords can be avoided if they invest through a company, rather than as an individual. This method has proved so popular that the number of applications for buy-to-let mortgages made by companies has increased three fold in the last 12 months.

These pending tax reforms were bought in to try and cool the buy-to-let market. Even though we have had a change of Chancellor since their announcement, there is a fear that new laws may be introduced to try and close this loophole.

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