Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Appalled Landlord" at "10/09/2015 - 22:11":

Appalled, I agree however they have also written positive stuff in our favour..have a look:
Recommendations:
(i) Remove clause 24 of the Finance Bill 2015-16 on the basis that it will lead to increased housing costs during an affordability crisis.
Mortgage interest, and associated costs, are legitimate revenue expenses which should be deducted from income prior to calculating tax liability. This is the case in other areas of business and there is no credible justification for removing the ability from private landlords.
To remove tax relief from private-landlords in this manner will jeopardize landlords’ businesses and put the affordability of housing at risk in many parts of the UK.
(ii) Amend clause 24 to ensure that only consumer landlords are effected.
The Chancellor’s Budget Statement, and the subsequent wording of clause 24 characterizes landlords as consumers, on a par with homeowners. The NLA believes this is inconsistent with HM Treasury’s recent implementation of the EU Mortgage Credit Directive by means of the Mortgage Credit Directive Order 20158, which states:
(4) For the purposes of this Part, a borrower is to be regarded as entering into an agreement for the purposes of a business carried on, or intended to be carried on, by the borrower if the agreement is a buy-to-let mortgage contract and—
(a)
(i) the borrower previously purchased, or is entering into the contract in order to finance the purchase by the borrower of, the land to which the agreement relates;
(ii) at the time of the purchase the borrower intended that the land would be occupied as a dwelling on the basis of a rental agreement and would not at any time be occupied as a dwelling by the borrower or by a related person, or where the borrower has not yet purchased the land the borrower has such an intention at the time of entering into the contract; and
(iii) where the borrower has purchased the land, since the time of the purchase the land has not at any time been occupied as a dwelling by the borrower or by a related person; or
(b) the borrower is the owner of land, other than the land to which the agreement relates, which is—
(i) occupied as a dwelling on the basis of a rental agreement and is not occupied as a dwelling by the borrower or by a related person.

The new rules do, however, apply to individuals, partnerships and limited liability partnerships. A strict reading of the draft legislation would suggest that a property business carried on by a partnership with even a single corporate member would be outside the new rules because such a business is undoubtedly “carried on by a company”. But presumably this is not the intention and it is to be expected that HMRC would seek to resist such an interpretation.

http://www.taxation.co.uk/taxation/Articles/2015/09/01/333612/squeeze-buy-let

The provisions extend beyond restricting relief for interest as an expense of a residential property letting business. They also apply to interest on a loan taken out to acquire an interest in a property letting partnership.

http://www.taxation.co.uk/taxation/Articles/2015/09/01/333612/squeeze-buy-let

Reply to the comment left by "Saeef Khan" at "11/09/2015 - 07:23":

Hi Saeef

The extract that you posted comes from page 6 of the NLA’s analysis published in August. But in September the author has accepted the statement that there will be no U-turn, and has even chosen to spread that message.

Their suggestion (ii), that the change should only apply to “consumer landlords” (whatever they are) is unworkable. In any case, I cannot see anything in the wording of clause 24 that “characterizes landlords as consumers”.

Reply to the comment left by "Kathy Evans" at "10/09/2015 - 22:19":

Hi Kathy,
Are you saying we can longer claim travel costs when we visit our properties for maintenance, periodic inspections and to conduct viewings? One of my properties is a 150 mile round trip from where I live!

Reply to the comment left by "Dom " at "11/09/2015 - 12:54":

It depends whether HMRC think that you are being supervised, directed or controlled (any one not all three) by someone else. So if your Ltd co is for "your own" rental properties (and not a letting agency), you are probably fine. But if it a letting agency, HMRC could argue that you were being directed in what you did by the landlord and that your job was to visit these properties, therefore it was a normal part of your job and claiming expenses for "normal travel" were a benefit in kind. Basically, nobody knows. It's more likely to affect freelance trainers, coaches, IT engineers, gardeners etc than landlords.

Reply to the comment left by "Appalled Landlord" at "11/09/2015 - 12:50":

If they characterise us as consumers then we should have all properties sold as CGT free.

They can't have both ways!

Reply to the comment left by "Saeef Khan" at "11/09/2015 - 13:30":

"They can’t have both ways!"

Problem for us is they can!

They are the government so they make the rules.

Reply to the comment left by "Kathy Evans" at "11/09/2015 - 13:17":

Hi Kathy, thanks for the update. Sadly, I'm not incorporated, just a private individual.Can I still claim my travel costs do you think?

Reply to the comment left by "Dom " at "11/09/2015 - 14:31":

The measure applies only to Ltd Cos with one director, so sole traders are fine.