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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13:14 PM, 14th July 2015, About 10 years ago

to do so*

Puzzler

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13:17 PM, 14th July 2015, About 10 years ago

I think that would be tax fraud if it reduces your tax liability

Appalled Landlord

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13:20 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Gary Mason" at "14/07/2015 - 12:45":

Hi Gary

Yes, you understand the impact all right.

Mark Alexander - Founder of Property118

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13:25 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Puzzler " at "14/07/2015 - 13:17":

Which comment were you responding to please?

Tax avoidance is perfectly legal, tax evasion is not.

Here's the case law ...

“Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax” (IRC v Duke of Westminster [ 1936 ] AC1 (HL)). IRC v Duke of Westminster (1936)
.

James dengel

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13:28 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Gary Mason" at "14/07/2015 - 13:06":

Hey Gary,
I'm going to show you the taxable pay changes but i don'#t have the time to do a full tax calculation.

Old way
20K job income
150K rental income less costs of = 110K (interest + costs)
Taxable income 60K

Then it's tax as normal with all the banding and personal allowances.

New way
20K job income
150K rental income less costs of = 40K( costs)
Taxable income 130K
work out the tax using normal bands
then apply interest relief 20% of 70K
income - relief = 130 - 14 =
116K

Then it's tax as normal with all the banding and personal allowances.

as you can see as the relief is a maximum of 20% if you never go into the 40% band you would not have an increase in tax. However they are using confusing terminology by telling you it depends on which band you are in, because they have changed how the bands are worked out. So you could be in the 20% bracket now and think yeah I have nothing to worry about however, if you are now pushed into the 40% band you do.

Hopefully this helps.

Appalled Landlord

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13:29 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Monty Bodkin" at "14/07/2015 - 12:29":

Hi Monty

I do not believe that the law compels us to claim an expense. If we did not claim a legitimate expense we would pay more tax.

But, as Gary has already pointed out, you would lose the 20% relief if you did not claim your interest.

Mark Alexander - Founder of Property118

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13:31 PM, 14th July 2015, About 10 years ago

As a follow on to the restructure strategy involving the creation of a head lease which I shared in comments on this thread yesterday, and for those of you still following this thread, you may well be interested to read my my write up that will appear in our Newsletter tomorrow - link below.
.

Puzzler

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13:31 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Mark Alexander" at "14/07/2015 - 13:25":

I was responding to the comment that said you could simply not declare your mortgage costs. I believe not declaring something which is taxable is fraud.

Mark Alexander - Founder of Property118

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13:34 PM, 14th July 2015, About 10 years ago

Reply to the comment left by "Puzzler " at "14/07/2015 - 13:31":

Mortgage costs are not taxable, either now or under the new proposals.

Failing to declare them would be madness though because the 20% tax relief would be lost.
.

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13:36 PM, 14th July 2015, About 10 years ago

Any benefit, concession, allowance or financial activity that a Landlord is involved in that has a relationship with income, or "declared" will need to be looked at as this will have far reaching implications ...as we are slowly exploring here.

Credit card companies will now be giving out crazy high credit limits now as declared income for Landlords is about to leap ! ...great for any stoozers out there !

To artificially inflate Landlord income is a crazy thing to do, from all angles as far as i can see..

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