Summer Budget 2015 – Landlords Reactions

It is inevitable they want rid of the portfolio landlord and control of it themselves the job is over everyone has to look after themselves and do what is best for them sad but true

Reply to the comment left by "Jon Pipllman" at "18/11/2015 - 18:02":

Jon, I suspect devil will be in detail when legislation is published in full. They have mentioned that, there have been number of amendments but we are unaware, what amendments, (if any).

I still hope that, they are not going to do it retrospectively.

Agreed but don't expect any favours this is a hatchet job of the individual portfolio landlord so they can give a bigger piece of the pie to there corporate cronies what they have done is unforgivable

Destroying viable businesses and hard working middle classes this mess will unravel in due course

These are details they have given so far:
Residential property lettings

Restrictions on the amount of financing costs which can be deducted by individuals, partnerships, trusts and personal representatives when calculating their income from a property business are included in the Act (s 24). The amount of mortgage interest or similar which can be deducted is restricted to 75% in 2017/18, then 50% in 2018/19, 25% in 2019/20 and to nil from 2020/21 onwards. Individuals will receive a basic rate tax reduction in respect of financing costs which cannot be deducted as a result of these measures. A committee stage amendment to s 24 ensures that companies chargeable to income tax are not subject to these restrictions (because companies generally are outside these provisions), and to enable trustees to claim the basic rate tax reduction in certain circumstances. A report stage amendment then clarifies that relief for interest on a loan to invest in a partnership is restricted where the partnership uses that investment for carrying on a UK or overseas property business that consists of residential property.

The withdrawal of the wear and tear allowance announced in the Summer Budget and its replacement with a relief for costs actually incurred is to be included in Finance Bill 2016. The proposed increase to rent a room relief with effect from 6 April 2016 has now been made by statutory instrument.

I am not sure if I am reading it incorrectly one of the amendment is that, you can not deduct 20% relief. (which they had previously announced)

This might mean, we'll be taxed in full- No tax Credit of 20%.

I hope I am wrong.

PS: "Individuals will receive a basic rate tax reduction in respect of financing costs which cannot be deducted as a result of these measures."

Can any accountant on this site answer this?

“Individuals will receive a basic rate tax reduction in respect of financing costs which cannot be deducted as a result of these measures.”

Reply to the comment left by "Saeef Khan" at "18/11/2015 - 18:41":

I'm not an accountant, but I understand that you will be able to deduct 20% of your finance costs to off set against your tax bill, which will be calculated based on your rent received, after allowable deductions e.g. costs of repairs / maintenance, agents' fees, buildings insurance

Reply to the comment left by "Chris Cooper" at "18/11/2015 - 18:48":

Thanks Chris, but why does it say that, reduction can not deducted as a result of these measures?

Reply to the comment left by "Saeef Khan" at "18/11/2015 - 18:18":

The amount of mortgage interest or similar which can be deducted is restricted to 75% in 2017/18, then 50% in 2018/19, 25% in 2019/20 and to nil from 2020/21 onwards.

Interest which cannot be deducted will instead quality for 20% tax relief.

The latest amendment with regards to Trusts is music to my ears. This is because trusts only pay 20% tax.
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Hi Saeef - I think it is because of the way it is structured. In effect HMRC are removing the tax relief completely. Then, once the tax payable on the rental income has been calculated, you can make a "basic rate" i.e. 20% tax deduction after the actual tax due has been calculated.