As with all previous years the tax rules have evolved.

The HMRC rules are becoming much more prescriptive as they fill in the gaps and loopholes in historical legislation.

As a result a full understanding of these rules allow tax payers to ensure that they do not fall foul of the changes.

Two areas have led to significant change which should be considered an opportunity as well as a threat to pay more tax.

Landlords have been attacked by new HMRC rules which restrict tax relief on mortgage interest.

This means that higher rate tax payers will pay more tax if they have buy to let properties with a mortgage.

There are two main way of counteracting this additional tax:

1. Holders of multiple properties should consolidate portfolios so that fewer properties are held, potentially mortgage free. So, if a landlord currently holds three properties each worth £150,000 with a £100,000 mortgage on each it makes sense to sell two of these and use the cash to clear the mortgage on the third. That allows the full rent to be collected without the need for a mortgage payment. The landlord will be fully taxed on the rent but then at least they are receiving the full rent rather than paying out a mortgage and still being taxed on the full rent.

2. Transfer any properties to family members who are not higher rate tax payers. There may be consequences with other taxes such as stamp duty and capital gains but the lower rate tax payer will not be caught by the change in rules. For instance, where a spouse is not a higher rate tax payer then it makes sense for any new properties to be bought by them rather than a higher rate tax payer spouse.

Dividend recipients have been attacked on one hand then handed a benefit with the other.

The first £5,000 of dividend income is completely tax free, in the vast majority of cases that means that any company can pass up to £5,000 of dividends to any individual without any tax consequences. From £5,000 to £43,000 is effectively taxed at 7.5 per cent (previously zero) then over £43,000 taxed at 32.5 per cent (previously 25 per cent). There are endless possibilities to be calculated but even higher rate tax payers could benefit from dividends in family companies up to £5,000 for the first time.