Summer Budget 2015 – Landlords Reactions

Thanks Mark and Shakeel...I'll get them sent this afternoon.

Brilliant letter Neil!.

Reply to the comment left by "G Cox" at "10/08/2015 - 02:58":

Hi Graham

“BOTTOM LINE FAULT 2. Removing the tax deductibility of the BTL interest payments higher rate tax payers.
I think this has no chance of reversing, but maybe a £ maximum interest cost deductibility at the higher rate might have a hope.”

As Ros would say, this is defeatist.

How would a maximum figure be devised for interest deductibility, and what would it be the aim of it?

Reply to the comment left by "Mark Alexander" at "10/08/2015 - 10:18":

Mark,
Does this new tax only apply to the interest of finance that was used for the PURCHASE of an investment property? ie if the property was then refurbished due to modernisation/repairs is that element of finance interest then fully allowable? Anyone know a tax specialist that we could contact that may be able to offer a free opinion.
I'm not a tax specialist but if the chancellor can rip up the tax rules then in my opinion that allows us to counter challenge the remaining tax logic. Perhaps we should be asking if revenue losses can be offset against capital gains. I don't know the tax law but who knows what a tax specialist may be able to counter argue with.
On a personal note I don't think the RLA or NLA should be holding ANY negation with the government, I think that they should be giving them an ultimatum of reverse this planned tax or that they would have no further communication in future about ANY landlord issues. As professional landlord associations they should consider the disrespect shown to landlords is heinous and that they would not deserve to be acknowledged in the future. I know that this would work against us in a lot of other issues but I don't care, that's the kind of person I am. The government is not good enough to talk to, let them make a fool of themselves and give then no support.

Reply to the comment left by "Jim S" at "10/08/2015 - 13:17":

In answer to your first question, No.
.

I was not suggesting that Plan A be abandoned, but that Plan B be prepared and lobbied for in some way.

Most people think like me.... that multi- millionaires paying no tax on because of high rate deduction on interest payment from high gearing (eg 75% or more) with no doubt their own plan B's to reduce the tax on gains that the gearing multiples creates whilst hoovering up what might be owner occupier stock is deserving of action.

So focussing everything on reversing the Chancellor's stance is unrealistic I suggest..

His weakest points are where the action does not match his stated objectives.

Some points have not even been touched in terms of the campaign as far as I read. It is for example immoral not to permit roll-over relief into a company having come up with this unannounced policy which traps or even renders people like .Mark. fatally illiquid.

Reply to the comment left by "Gary Dully" at "10/08/2015 - 01:12":

Hi Gary

You may well have to increase rents by 32%, but not because of the calculation that you have shown.

We will not be taxed on 80% of our finance costs at 40%. 100% them will be disallowed, increasing our deemed rental income. This will be added to all other income and the tax will be calculated using the personal allowance and working through the tax bands. HMRC will then allow 20% of the interest as a relief, and give this relief by deducting it from the amount of tax that they calculated.

The effect is that if someone was paying tax at 40% under the current rules, his extra tax will be 20% of his finance costs.

If he was paying 45% under the current rules, his extra tax will be 25% of his finance costs.

If he was paying tax at 20% under the current rules, his extra tax will be anything up to 25% of his finance costs.

32% is not the increase that everyone would need to apply to their rents. The percentage increase depends on many variables. It will be different for everyone. Each landlord will have to do his own calculation, as follows:
1. Download the spreadsheet from the top of the lead article at the top of the page
2. Calculate the increase in tax using the Calculator sheet by entering your current annual figures
3. Multiply the tax increase by 100, and divide it by 60 (or 55 if you will pay 45% tax), to find the required extra rent
4. Divide this extra rent by your current rent and multiply it by 100 to find the percentage increase.

Reply to the comment left by "Appalled Landlord" at "10/08/2015 - 13:34":

I concur - well explained.
.

Reply to the comment left by "Mark Alexander" at "10/08/2015 - 09:45":

I had already sent the petition FAQ and examples via our local FSB policy committee. It might not be a bad idea for people to find out the names of their local FSB policy reps and email them, too, or just the chair of their local branch.

Reply to the comment left by "Kathy Evans" at "10/08/2015 - 14:32":

And their local Chambers of Commerce 😉
.

Reply to the comment left by "James Tallis" at "10/08/2015 - 09:25":

Hi James
The debt is for the purchase of the house - and the buy to let market wouldn't be there without the large amount of lending - by way of buy to let mortgages.
I don't understand why they want to punish people who have taken on this debt - as this proposal is effectively taxing this debt.