Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "James Tallis" at "13/07/2015 - 19:16":

Odd that ?!

why is carrying out the same activities considered to be, or not to be, a business depending on wether you are a sole trader/ partnership or ltd comapany ?

BTL is BTL regardless of holding entity, as a pension fund, as a housing assoc, as a ltd co ...but not as an individual any longer it seems..

Reply to the comment left by "Richard Kiru" at "13/07/2015 - 15:38":

How many times need this be said...:). If you want to operate as a business....set up a limited company. Is it fair that private owner occupiers do not receive relief?

Reply to the comment left by "James Tallis" at "13/07/2015 - 19:16":

Nonsense

Reply to the comment left by "Neil Robb" at "13/07/2015 - 18:53":

You keep laughing mate...but only when you have read what I have stated...it is only optimism may be low chance but still some chance.

Reply to the comment left by "James Tallis" at "13/07/2015 - 19:28":

What is the relevance of tax relief for owner occupiers?

Here's a whacky idea for you to ponder!

Just suppose I set up a new limited company and I walk into my banks and ask for a big loan, equal to my BTL mortgage.

The first four questions the bank manager will ask me are likely to be:-

1) What is the security?

2) How will you service the loan?

3) Why do you want the money?

4) What is your track record?

I respond:-

1) I am prepared to give him a personal guarantee secured by a charge over my BTL properties which are worth £.........

2) I will create a 25 year lease of my properties to the new company at a rent sufficient to match his interest cover requirements.

3) I want the money to repay my existing BTL mortgages as the tax regime is no longer effective for me. I can't transfer the properties to the company without incurring CGT, which is sadly not available for rollover relief

4) My pedigree as a landlords is ..........

This takes me right back to my problem solving days as a rookie commercial finance broker.

All I need to do now is to persuade a BTL mortgage lender to offer me decent terms. I suspect they are as worried about the Budget announcements as most portfolio landlords are so I suspect they might be a lot easier to convince than some people might imagine.

Have I cracked the problem for established portfolio landlords like me, who will be worst affected by this budget?

Only time will tell 😀

I am very grateful to the Chancellor for giving me two years to fix this problem!
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I think it is nonsense for the distinction to be made between private owner-occupiers and landlords as invariably, landlords are both. I pay a lot of interest on my privately-owned home, as do others, as well as running a BTL business. And I wonder where the exact figures and independent research is that 'proves' that landlords are somehow pricing out first-time buyers. Unfortunately, it's all part of the usual scapegoating of landlords, based on false assumptions about our lives and what we do. Any decent people I tell about my business and the problems I have faced over the years with tenants from hell in particular, say 'How can you do it? It sounds like such a difficult and stressful business.' And now we get this crap from the Government. I, too, am an optimist though and believe that it just can't go through as it stands because it's outrageous - for various reasons - the idea of taxing a cost is farcical and the unfairness of charging individuals for providing a service, but not charging Housing Associations or companies is also unbelievable. So I refuse to believe it can go through in this form. If it does, Britain will no longer be Great.
What we have to do, as ever, is clarify as much as we can what is wrong with it, express it in the most simple and convincing way possible and then bombard the MPs and Ministers etc with this.

Reply to the comment left by "kathleen drea" at "13/07/2015 - 17:40":

Your suggestion of a levvy works for me. Ie use the same accountancy methodology and if you are a HRT then an extra amount of tax is payable.

I know some say your methodology makes no 'net' difference but I think it does. I have tried to articulate it before unsuccessfully.

Here are many issues but one which I am sure was not intended is a higher declared 'taxable profit'. To allow a full deduction of interest first to calculate profit - then apply a levvy if you are still at HRT has the following advantages:

1) Basic Rate Tax Payers stay at BRT regardless.

2) No inadvertent issues around higher incomes eg child maintainance payments etc

3) no tax where there is no profit.

4) the levvy can be proportionate is you are straddled across the tax bracket.

There are several others but I hope people can see the distinction. The current proposal is a fundamental change to the accountancy process. This levvy approach still feels unfair particularly because I am impacted. But at least 'it does what is says on the tin'

Reply to the comment left by "Ros ." at "13/07/2015 - 19:47":

Ros, please see my letter to my MP - link below
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Reply to the comment left by "Simone Gilks (Mortgage Adviser)" at "13/07/2015 - 18:11":

Hi Simone

How long have you known that George Osborne was going to impose this levy, and on individuals but not on companies?

I paid a Chartered Accountant 16 years ago to advise me whether or not to hold properties in a company. The advice was against doing so.

I really enjoy people coming on this forum to boast how they are not affected, as if they knew in advance that this discrimination was going to be proposed.

I don’t think your post will get you any new business from those who read it. However, I was amused to see that you cannot spell the thing that you sell.