Summer Budget 2015 – Landlords Reactions

>Costas

Are you using the same Ltd co for both consultancy work and property?

Reply to the comment left by "Jon Pipllman" at "22/10/2015 - 10:39":

Definately not.....wanted to keep liabilities completely separate.

I have had an acknowledgement, surprisingly, from the Conservative Chairman's Office, to the email I sent in reply to their mass email begging letter.

I have replied with:

Thank you for replying to my email. It was a refreshing surprise.

I would like to add to the comments already made by including the submission below.

It would be really good if I got a reply that wasn't the standard email sent out by Mr Gauke, which I and others have received numerous times.

.......letter by BTL Investor Scotland Concerns raised about the BTL Tax Grab................

Please listen to us...a quick tax grab now will lead to devastation of the PRS and many people made homeless. Not good for the future economy of the UK.

Reply to the comment left by "Manchester Landlord" at "21/10/2015 - 20:07":

I agree with everything you say, however I still feel we need to focus on engaging more landlords & the petition is as good as any barometer in measuring how many landlords are even aware of Clause 24. Without engaging more of the landlord community, we are weaker. We need a louder voice to fight not only today's battles but what no doubt lays ahead of us. If more landlords become aware & get angry today, may be they'll start surfing the web to seek help & will hopefully join one or more of the many discussions taking place in various forums like Property118. Simultaneously we need the heads of these various forums & Associations; RLA & NLA etc to find a way to come together as a cohesive force in whatever guise (whilst still retaining their independent identities of course) so that we can quickly become one with a much stronger voice when there is a need to fight attacks on the private landlord community.

Kathy

You know when it comes to property it's all about location.

But that's especially true when it comes to finding tenants.

Our leasing manager, Brendan Wallflower tells you why...

"Most tenants know the area where they want to live and start to search for properties in that neighborhood.

More often that's their primary concern. They don't really care about the look of the property or how many rooms it has – as long as it meets their needs."

That's the reason we only buy properties in good areas, close to schools, shops, restaurants and public transport.

But over the last few years our job has got much easier.

Because many Detroit neighborhoods have been vastly improved.

In fact, all these changes have happened in the last year...

More than 6,000 derelict properties have been demolished

Every neighborhood has new street lights

Sidewalks have been improved or replaced

Schools have been upgraded

Parks and playfields have been improved and maintained
What's more, these days City inspectors drive around looking for anything that is out of place.

It could be something as simple as the grass being too high in your back garden.

Or maybe your tenants left the trash-can out on the wrong day, or simply parked their car on the street for too long.

If that happens your tenants gets a fine.

And of course they won't be happy about that.

But all these things help to improve the look of a neighborhood and prevent crime.

That makes the area more desirable.

Which means more people will want to live there.

But the best thing is, it increases house prices in the surrounding area.

If we get city inspectors here it will definitely be the landlord which gets fined

For information, a copy of a letter I have just received from Daniel Zeichner, MP who is also on the Finance Bill Committee (which of course voted unanimously in favour of Clause 24):

'Thank you for contacting me regarding the Government's proposals in the Summer Budget to restrict relief for individual residential landlords to the basic rate of income tax.

As I am sure you are aware, this policy is legislated for in the Finance Bill that is currently being debated by Parliament, and would be phased in over the next four years from April 2017.

I know that a number of landlords and the National Landlords Association (NLA) have expressed concern about this measure and the potential impact it could have on landlords' incomes and rent levels. I have been struck by some very powerful submissions from landlords - it is clear to me that the Government has failed to consult properly and has not understood some potentially unintended outcomes. I also believe, however, that some action does need to be taken to prevent the buy-to-let market squeezing out first-time buyers and those looking to move up the housing ladder. Indeed, the Bank of England have warned that the rapid growth in this type of mortgage could pose a serious risk to the UK's financial stability. I also think it is important - particularly in the current economic climate - to look at some of the tax reliefs that are available and ensure that they are justified. Most of all, we need a balanced approach, rather than sudden lurches in policy direction, which could have serious consequences for the many small landlords who provide a very good service, and which could threaten future investment.

I will therefore follow this issue closely as it is debated in Parliament. It is also clear, though, that these measures and the Government's wider proposals in the Summer Budget will not help address the chronic housing crisis we are currently facing - with home ownership falling and the number of affordable homes in decline. I believe we need concerted action to address this and I can assure you that I will continue to press the Government on this.

Thank you once again for writing to me and for sharing your views. I will, of course, bear them in mind as this issue develops.'

I will get back to him and point out that it is the 'larger landlords' who will be most affected and therefore a massive number of tenants. There is still that idea that if you have one or two houses you're okay, but if you run a larger business you're not. Although I have also seen the reverse argued - that the latter are proper businesses and the former amateurs who should be driven out...

Reply to the comment left by "KATHY MILLER" at "22/10/2015 - 12:22":

Perhaps Blackpool council, landlords and tenants should follow this good advice

Reply to the comment left by "Ros ." at "22/10/2015 - 13:19":

One of the more positive responses received thus far compared to some if not most of the replies received from MP's to date. Well done Ros.
His reference to the NLA I presume relates to the NLA's lengthy submission in August & the next step in the process of The Report Stage and Third Reading of the Finance Bill Scheduled for 26 October in which MPs have an opportunity on the floor of the House, to consider further amendments to a Bill which has been examined in committee, but unlike the Committee Stage, contributions are not limited to those selected to sit on the committee.
For this next stage, the NLA state they have been working with a number of MPs and have the agreement of some backbenchers to raise the issue and table amendments to clause 24. But what is concerning is the NLA go on to say they are working with tax professionals to draft these amendments that will likely focus on the means of calculating taxable income to minimise the impact on landlords with "moderate" incomes. Which begs the question - what is a moderate income? Is moderate deemed to be a taxable income below the HRT threshold or just above the minimum wage or below the Child Benefit income threshold. Plus do they mean a moderate income from just rental properties or combined with their earned income? Dependent on how they arrive at the word moderate & what a moderate amount of income is deemed to be, this may include the larger landlord if they have a high rental income turnover with high finance costs.
If we know the outcome within 24-48 hours of 26th October, it likely means we have been unsuccessful again to carry the support of MPs & convince the Government of the need to amend the Bill. If however we don't hear straight away, this may, just may mean the possibility of some good news as debates for lengthy or complex bills can take up to several days.

Reply to the comment left by "Lisa Stux" at "22/10/2015 - 11:37":

Lisa, you say 'a quick tax grab'. Whilst that is correct, longer term surely Clause 24 will be seen as the defining moment that led to the substantial reduction of tax revenue from the PRS?

As wrote a few days ago: 'It’s clear that C24 is a (v short term) tax grab on the minority of residential landlords (many LLs are actually likely to benefit as a direct result of C24). However longer term it will obviously reduce HMRC revenues wrt income & capital gains taxes as leveraged non incorporated LLs will become leveraged incorporated LLs where they can. More BTLs will then be passed on from one generation to the next and the next etc as shares in a business possibly held as a trust, largely avoiding much of the CGT, SDLT & IHT that HMRC would otherwise generate if their supposed allies HMT hadn’t conjured up C24.'

Please can someone correct me if above is wrong?

As to the concern that keeps cropping up on this thread about GO possibly going after LTD company landlords next, surely that is unlikely as it would be hard for him to attack small corporate LLs without attacking LARGE corporate LLs simultaneously? He would have to be a little devious to achieve one but not the other.

Finally, if anyone reading this has not already written to and had a meeting with their MP yet re C24, suggest you do it TODAY.

Reply to the comment left by "Mark Shine" at "22/10/2015 - 16:32":

Sadly Inheritance Tax Business Property Relief (BPR) has generally been denied for Ltd Cos engaged in property letting activities (unlike property development businesses which do qualify for BRP) even where the landlord provided some services. More recently, BPR was also refused on a furnished holiday letting business (HMRC v Mrs N V Pawson’s Personal Representative [2013] UKUT 050)