Summer Budget 2015 – Landlords Reactions

Summer Budget 2015 – Landlords Reactions

14:00 PM, 8th July 2015, About 10 years ago 9619

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Budget 2015 - Landlords Reactions

The concern is;

Budget proposals to “restrict finance cost relief to individual landlords”Summer Budget 2015 - Landlords Reactions

To calculate the impact of this policy on your personal finances download this software


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22:45 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Simon Dewsberry" at "11/07/2015 - 22:13":

Simon,

Interest is added on to your income, say for argument sake, you earned £25000 in rental income and then additional £40000 in interest payments you have effectively earned £65000 under new rules.

So, you will pay 20% tax up to £43k therefore additional £18k will be taxed @ 20% which would amount to £3600.

Then remaining £22000 (the difference between basic rate and £65000) will be taxed @ 40% £8800.

Therefore your total tax £8800 plus £3600 = £12400

Then subtract £40000 @ 20% (interest relief) £8000.

Total liability £12400-£8000 = £4400.

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22:50 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Jack D" at "11/07/2015 - 22:42":

Jack,

In above example we assume that there was no rental surplus or you can even assume that, your net rental was £35k.

I have already seen that article you are making reference to.

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23:03 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Gary Mason" at "11/07/2015 - 22:45":

if rent earned (do you mean rent collected?) is 25K and 40K is interest paid out then i have a business model i dont want as i am 15K out of pocket before we go any further....i certainly havent earned 65K at al have I ? ...you need to go back to your accountant to clarify the figures !

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23:08 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Mark Alexander" at "11/07/2015 - 22:33":

In my experience Mark , rental income is not readily accepted for residential mortgage applications is ?!!!

Jack D

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23:12 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Gary Mason" at "11/07/2015 - 22:45":

Sorry Gary, you've lost me on this.

Something seems adrift with the numbers and methodology being used in the calcs. Maybe somebody else can make sense of it and advise.

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23:55 PM, 11th July 2015, About 10 years ago

Reply to the comment left by "Simon Dewsberry" at "11/07/2015 - 23:03":

Simon,

That is absolutely right. Despite, you have not made any profits you are still taxed and yes buy to let landlords will be left out of pocket.

Rental income is not accepted for mortgage application- That's right.

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0:00 AM, 12th July 2015, About 10 years ago

Reply to the comment left by "Jack D" at "11/07/2015 - 23:12":

Jack,

I am sorry if I have confused you but I am adamant that, this is how landlords will be taxed.

Even the article you were referring to earlier on makes deductions for "Non Financial Costs and it assumes rest of is interest element.

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0:02 AM, 12th July 2015, About 10 years ago

Reply to the comment left by "Simon Dewsberry" at "11/07/2015 - 23:03":

Simon,

In this case I am referring to net rent (profit) or your employment income.

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0:30 AM, 12th July 2015, About 10 years ago

Reply to the comment left by "Asif Ahmed" at "11/07/2015 - 19:01":

if rent caps are put in place by a rent officer and form part of Landlord regstration with draconian fines in place like HMO licensing has on number of occupants etc...then for sure they will work. A 20k fine and repayment of rent already collected is enough motivation for any landlord to adhere to any rent cap enforced i would think. Make no mistake, BTL is being regulated in no uncertain terms.

James Leavesden

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0:32 AM, 12th July 2015, About 10 years ago

Reply to the comment left by "Gary Mason" at "12/07/2015 - 00:00":

I think there must be some misunderstanding here. By adding rental income to mortgage interest you seem to be suggesting a landlord with a mortgage is going to be paying more tax than a landlord with no mortgage. That's clearly wrong.

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