Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Phil Landlord" at "29/07/2015 - 09:50":

Agree - example of Dave and Margaret will not be a tear-jerker. Your suggestion to hit home the inflated tax that will not be oin relation to real income / profit needs to be prominent and perhaps even override the figures that inspire the "serves them right mentality". I think setting out the whole calculation inevitably will be a target. The resultant percentage of tax, which becomes exorbitant is what non-landlords need to see and imagine that applied to them, whatever their job! It then becomes unreasonable, unethical, unlawful!

Reply to the comment left by "Phil Landlord" at "29/07/2015 - 09:50":

Hi Phil

You said ...

"I personally believe the point being raised by this forum is well know and understood by the policy maker. And 'Dave and Margaret' who after decades of trading only receive £50k profit are already in trouble because when rates double (which is the very least they will do one day) then their interest is £700k anyway….they are already have a model fundamentally flawed."

I understand the point you are making and I think you are right to raise the point because all of our arguments must withstand a high level of scrutiny.

Perhaps a bit more detail could be added to address such critique, e.g. Dave and Margaret recently fixed their interest rate at 4.99% for 10 years to protect their business from risks associated with rises in interest rates. If they were to look at selling their properties they would incur early repayment charges on their finance as well as Capital Gains Tax, the sum total of which would be greater than the the proceeds of sale after factoring in repayment of the mortgage and selling costs.
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I have just spoken to Ruhal on the telephone. What a wonderful man.

He is completely understanding of the points I have raised (some of which I will not mention here but Ros and Connie are aware of them because we have also spoken offline) and he agrees that the petition should be in the name of Dr R Beck.

Ruhal has agreed for his petition to be taken down.

Ros will speak to the petitions officer today and hopefully our petition will go online shortly thereafter.
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Reply to the comment left by "Mark Alexander" at "29/07/2015 - 10:27":

Which begs the question why the government attempts to protect high risk businesses and start-up businesses, just not this one. I think the fact that individual landlords have businesses that should be treated as any other business cannot be reiterated enough. It certainly has all the ins and outs and risks. The tax of profit is a given. This - I don't even know what this is.

Reply to the comment left by "Mark Alexander" at "29/07/2015 - 10:34":

Thank you, Mark, Ros. Thanks, Ruhal!

Reply to the comment left by "Mark Alexander" at "29/07/2015 - 10:34":

Respect to Ruhal, not just because he's with us on taking the issue forward, but also because he was the first of the 4 million Landlords in the country to take action and start the petition.

On the Dave and Margaret example, perhaps we should lead with something along the lines of "Dave and Margaret fear the prospects of these tax changes leaving 187 of their tenants homeless."
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Reply to the comment left by "John McKay" at "29/07/2015 - 10:42":

Here, here!

I also respect Ruhal for his condemnation of against Islamic State on his Facebook page.

We must all remember that those of us who put ourselves in the public domain will be researched and ridiculed by some very nasty people.

I have already suffered this; by way of example, the comments posted on HPC regarding my wife ("moist Russian mail order bride etc") are absolutely disgusting.
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Joe is a teacher and has only one buy to let property. He is a 40% taxpayer. His rental income is £7,200 per annum; his mortgage costs are £2,500; and his repairs and other tax deductible costs are £1000. Under the current tax system, Joe would pay £1,480 tax. Under the proposed tax system, Joe would pay £1,980 tax, an increase of £500. For Joe, the new tax system still results in him making a ‘real profit’ but his effective rate of tax on ‘real profit’ increases from 40% to 53.5%.

I was thinking of re-framing the above example and am quite sure someone will take my point and run with it, if it is viable. His mortgage costs could also realistically be higher.

Joe is not a 40% tax payer under the current system. He has one buy to let property.However as his gross rental profits are added to his income before his mortgage interest is deducted.
This means he now pays 40% tax on any rental income and is only allowed 20% deduction on mortgage relief.

Perhaps something similar has already been rejected

Reply to the comment left by "Harold Levine" at "29/07/2015 - 11:13":

40% to 53.5% is not alarming. Many people would just say, well just pay the extra £500. It's when no other income will supplement the cost. Joe will survive. You're also right, his mortgage cost on one would be higher - otherwise, I'd like to know what deal he got.