Owning a rental property means you’ll have to consider several tax factors: income tax on rental income, capital gains tax if you sell the property for profit, and possibly others. Recent tax changes have also reduced the mortgage interest you can offset against rental income for tax purposes. It’s wise to consult a tax advisor to understand your entire tax liability.
Top Slicing enables customers who have a shortfall in their required lending to use a proportion of their earned income when the rental income for the BTL property is not sufficient to meet the lender’s standard rental cover ratio (RCR) calculation. Not all lenders allow top-slicing, and you may need a minimum annual income greater than £25,000.