OTS proposals to simplify income tax for landlords

On 1 November 2022 the Office of Tax Simplification (OTS) published its report on simplifying income tax for residential landlords (tinyurl.com/otsproperty2022). As nearly one in ten UK income taxpayers have income from property this is an issue of interest to many clients and their tax advisers.

The OTS report runs to 113 pages and covers a multitude of areas including ownership and financing allowances and reliefs treatment of certain expenses (primarily focusing on repairs) the furnished holiday lettings regime making tax digital for income tax and ownership of UK property by non-UK residents.

The executive summary states: ‘Residential property is an unusual asset class in that it can be treated for tax purposes as a place to live an investment a business or even as a trade with quite different tax consequences.’ Some landlords make a deliberate choice...