Summer Budget 2015 – Landlords Reactions

http://www.directlineforbusiness.co.uk/news/trouble-for-landlords-over-white-goods

Reply to the comment left by "Saeef Khan" at "06/12/2015 - 19:57":

GAAR is anti avoidance of tax. This is about avoiding the need to refinance and has nothing to do with tax.

S162 is a perfectly legitimate tax relief.

In short, NO!
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Reply to the comment left by "Mark Alexander" at "06/12/2015 - 20:10":

That's great Mark. Thanks for that.

Is there any particular reason, HMRC won't give pre-clearance?

Reply to the comment left by "Saeef Khan" at "06/12/2015 - 20:13":

Yes, it's because HMRC can only give clearance on tax planning such as s162 relief claims.

The creation of a beneficial interest company trust has no effect on tax. It's purpose is to avoid the need to refinance.
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Hi Lisa

http://www.thisismoney.co.uk/money/mortgageshome/article-3341846/Hope-prisoners-banks-ordered-allow-elderly-borrowers-stay-homes.html

Reply to the comment left by "Saeef Khan" at "06/12/2015 - 19:26":

Hi Saeef

Yes my properties are all held as an individual
I am sitting on the fence at the moment about incorporation but on balance as it stands i doubt if I will go that route although I read with interest Marks recent post about a possible way around it.

I have received preliminary figures from my accountant but will chew them over with him properly in the New Year before making any final decisions . I still do very well and will happily survive if i do nothing at all but that`s not to mean I cannot improve my position if i do do something.

Additional though another influencing factor for me personally is I stopped buying for myself in 2012 having reach my own goals so downsizing say 50% and paying off 50% is more attractive now than it was before all this happened. I am very reluctant to do that though as it reverses my whole investing philosophy about leverage and the incredible returns you can gain with compound capital growth

My concern about incorporation is also that George has done all this to clip our wings and stem BTL`ers stealing the show and from becoming too dominant in the marketplace. BTL had all the hallmarks of a sort of pyramid scheme and growing exponentially at a very rapid rate and distorting the whole status quo. So I understand ( I think) why he has done what he has done.

If everyone though then successfully escapes his clutches through incorporation or other creative avoidance measures then he will not have succeeded in his aim and therefore he will be forced to strike again perhaps at the incorporated buy to letters to cull further

Then all that hassle and expense to change over will be in vain. If his overall aim is to stop the rapid expansion of BTL he will succeed one way or other. I may just roll over and pay the extra tax but comforted in the knowledge that I still will be very much better off than if i didn't own any property at all.

The change has just been made, people are still absorbing the effects and new ideas on dealing with it will come to the fore over the next year. I don`t think the dust has settled and wont do for some time yet.. The government will now watch and wait in the wings to see what the effect the measures has on us and the economy at large. I most likely will do the same.
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Reply to the comment left by "Mark Alexander" at "06/12/2015 - 20:25":

I see, I got it now! That's brilliant.

Reply to the comment left by "Jonathan Clarke" at "06/12/2015 - 20:35":

Hi Jonathan

I suspect incorporation will not be viable for the vast majority of landlords. My best guess has always been that portfolio's worth £5 million and upwards will be, but I suspect that's less than 5% of all landlords. Some of these, including me, will have a different strategy. It is no secret that I intend to move abroad and then downsize, avoiding CGT on gains up to April 2016. That strategy suits me because I have very few ties to the UK at my stage of life and my wife and I actually want to live abroad, have less stress and more cash in the bank. Having just reached a divorce financial settlement I am well outside the comfort zone I've previously been in with regards to liquidity. I will resore that balance and enjoy an easier life. I fully appreciate that's not going to appeal to everybody either, hence I've been working hard to research practical alternatives to recommend to other landlords.
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Reply to the comment left by "Jonathan Clarke" at "06/12/2015 - 20:35":

Jonathan,

That's interesting and I concur with your notion, "if everyone though then successfully escapes his clutches through incorporation or other creative avoidance measures then he will not have succeeded in his aim and therefore he will be forced to strike again perhaps at the incorporated buy to letters to cull further."

This is the biggest risk, when you seek greener grass on other side of fence, particularly when Osborne is involved as he could potentially scupper all good works of incorporated landlords by making a following statement:

"It has been pointed out to me that, Leveraged Landlords have attempted to escape my Summer 2015 Tax Changes therefore, I am today announcing that now same rules would apply to all incoporated landlords who were previously individual landlords.

A friend of mine that has one buy to let in our town just had to re let it

He was telling me last night that the 8 viewings he had where all tenants who had to move because they landlord was selling due to tax reasons

The longer time goes on in certain areas there is going to be a flood of properties making it a buyers market and more difficult for leveraged landlords like myself to get a return

I believe will get worse as where are all these FTB coming from ?