Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Trendo " at "18/08/2015 - 17:56":

Hi Trendo

Do you mean you can’t believe that the tax on zero real rental profit will be only £21,400?

You are right to disbelieve it – the tax will be £2,200 more. This is because Mr McTernan forgot to restrict the “relief” to the lower of:

the finance costs (150k),

the deemed rental income (also 150K), and

the total income (excluding income and dividend income) that exceeds the personal allowance.

As this landlord has no other income his total income is the deemed rental income (150K). From this, the personal allowance is deducted (11k), leaving 139k. As this is the lowest of the three figures, tax relief is limited to 139k x 20%. So it becomes £27,800, not £30,000.

The £11,000 are excess finance costs that will be carried forward to the next tax year.

I hope this demonstrates that these carry-forwards are not going to save us. They have been a red herring today.

The fact is that the landlord has retained no cash from his year of renting properties, and has to find £23,600 from somewhere else to give to HMRC.

On the bright side though, if the Chancellor does what the originator of this levy wants (the brillliant Natalie Bennett of the giant Green Party) this money will go towards building 100,000 social housing units a year. That would almost equal the total number of dwellings of all types that were built last year, which was just under 119,000. Shouldn’t be a problem if we can double the construction workforce.

Reply to the comment left by "Monty Bodkin" at "18/08/2015 - 21:22":

Hi Monty

It’s easy to work out what rent increase you will need, as follows:

Download the spreadsheet from the top of the lead article at the top of the page.

Calculate the increase in tax using the Calculator sheet by entering your current annual figures (your share only if you are a joint owner).

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.

Divide this extra rent by your current rent and multiply it by 100 to find the percentage increase.

Reply to the comment left by "Saeef Khan" at "18/08/2015 - 19:44":

And thats on low interest rates!

Reply to the comment left by "Saeef Khan" at "18/08/2015 - 19:44":

And thats on low interest rates!

Reply to the comment left by "Ros ." at "18/08/2015 - 20:08":

That's the trouble Ros the government intend to take every bit of money they can get their hands on. After the landlords who will be next.

It also worries me that for landlords becoming non resident he could alter this area to.
Hes already tighten up quite a bit .

Reply to the comment left by "Monty Bodkin" at "18/08/2015 - 20:37":

Hi

Some of my tenants are willing to write letters to how they will be affected by this policy. can any other landlords get their tenants to write in?

Reply to the comment left by "Appalled Landlord" at "18/08/2015 - 22:07":

I thought you lost the personal allowance at around 120,000

Reply to the comment left by "Appalled Landlord" at "18/08/2015 - 22:17":

Appalled Landlord,

I know, as close as anyone does, how much this will cost me.

I know, roughly, how much it will cost my tenants.

What I don't know is how much this will cost tenants overall or how much this will cost individual sectors within the market.

The best indication so far has been the Scottish survey of a 12% rent increase.
But is that compounded? Who knows?

Whatever the answer, it is a far better estimate than HMRC's back of a fag packet ludicrous assesment of 'no significant impact on rents'.

The consequences of this have either been not thought through or they have not been disclosed.

I recall, Natalie Banett getting grilled by Jermy Paxman few months ago. When she suggested, that, landlords. Interest relief abolition will help government build 90000 houses a year.

When Paxman asked her to illustrate her figures in layman terms, she did not stop coughing and told Paxman "As you can see I am not feeling too well.

Paxman, took pleasure and asked her "Are you alright"...It was absolutely hilarious.

An Australian born woman, who has not got a scooby as to how taxation should work but to my surprise, Osborne inherited her idea and almost implemented it.

Flabbergasted.

Reply to the comment left by "KATHY MILLER" at "18/08/2015 - 22:49":

Hi Kathy

Yes, around that figure.

But in working out whether to limit the “relief,” HMRC will deduct the personal allowance from your total income regardless of how big or small the latter is.