Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Laura Delow" at "07/12/2015 - 08:35":

Hi Laura

I think you may be confusing two parts.

The first part is to find out from an accountant whether you would qualify for s162 relief.

If you do, the second part is to consider the viability of refinancing against the beneficial incorporation trust route to avoid refinancing.

We have written a separate article on s162 incorporation which you can find via our home page or the tax section of this website.
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Reply to the comment left by "Mark Alexander" at "06/12/2015 - 21:10":

Hi Mark

Not exactly the same rules for companies as private individuals maybe but the government can and will surely find without hesitation (now it seems ) a different structure with bespoke new rules to thwart any creative strategies which attempts to block his goal of reducing private individuals retaining or building in the future very large portfolios.

One or two properties is not a problem but the second generation of investors have seen the likes of Fergus Wilson amass 800 or so private lets and beginning to distort local markets. It is not uncommon to hear people with 100 plus portfolios and good luck to them. But the government wants to stem that adrenaline rush in budding property entrepreneurs

If landlords did form a `union` and band together which these days through the likes of 118 and other social media outlets is very much easier than it was in 1996 then you can envisage easily the power we would have to potentially hold the country to ransom with the likes of coordinated Sec 21 action for example or by putting 10,000 homes on the market simultaneously.

It would be a brinkmanship exercise i agree and not for the fainthearted but when push comes to shove many respectable professions like the junior doctors recently are able to maybe force change in policy / attitude by collective action.

Negotiation is better than confrontation of course but my fear is I guess spending too much up front on seemingly attractive escape avenues unless there is a certain guarantee of its effectiveness. Maybe it needs an attached insurance scheme similar to RGI

Jonathon, I couldn't disagree more. Clause 24 is not the fault of my tenants and they shouldn't take the blame for it. I personally would not issue a section 21 notice unless the tenant stopped paying the rent or started wrecking the property. We are already vilified enough as it is, and a coordinated section 21 would make matters far worst.

The way forward is to keep campaigning to raise awareness, and I also believe the unintended consequences will start to speak volumes over the coming years - namely, lack of supply leading to higher rents.

Reply to the comment left by "KATHY MILLER" at "07/12/2015 - 06:59":

I agree it will make a dent but I think that dent will be a very small one. When one of my LHA properties becomes free 20 applications lie in my waiting list file before i even have to think about advertising. And they are just the tip of the iceberg .

There are 400 listed homeless in Milton Keynes where i am and we are taking 80 Syrian refugees in addition I hear. These are the headline stats though . There are literally hundreds and hundreds sofa surfing and living in cramped accommodation which need adequate housing which do not even show on the official statistics. The government builds will just touch the surface in my view..

Reply to the comment left by "Manchester Landlord" at "07/12/2015 - 09:24":

And when I say lack of supply. I mean house builders are almost certain to build less properties due to the new stamp duty levy, as they rely massively on off plan buy to let purchases. Not to forget tighter lending criteria which will be imposed on the BTL sector by the BOE. A rising population coupled with housing building unable to keep up with demand surely must equal higher rental prices.

Reply to the comment left by "Manchester Landlord" at "07/12/2015 - 09:24":

Dont get me wrong i dont want the tenants to suffer. I would work with them to achieve a common goal . In the same way I`m sure the junior doctors don`t want someone to die if they go on strike. My proposed action would be done with the full consent and knowledge of my tenants. Short term pain . Long term gain.
Many of those who would join me are in one beds but need two anyway as they have had kids over the past 5 years. But i cannot supply. They actively want me to serve them sec 21`s.

Developer gets £51.5m funding for rental development

http://todayslandlord.co.uk/article-desc-4289_developer-gets-163515m-funding-for-rental-development#.VmVRdbiLQdU

Reply to the comment left by "Jonathan Clarke" at "07/12/2015 - 09:26":

maybe, I wish I was as confident as you.

Reply to the comment left by "Mark Shine" at "07/12/2015 - 01:43":

Yes, Mark, this is a good point. I have known for a while that I could get more out of my portfolio financially - higher rents, maximising space, keeping costs down, a bit of remortgaging - and these are now things that I am implementing. For tenants though, the higher rents and limiting maintenance costs is a negative of course and not something I would have wanted to do.

It has also now made me think of other legal ways that I can gradually set things up so that I may for example have half of what GO has turned into an 'interest tax liability' (rather than just normal finance costs any business faces) than I pay now. I'm not putting my ideas out there though in case they become general knowledge and GO works on stopping that escape route...

It is important that we all continue to campaign against C24 whilst simultaneously taking action to mitigate its effects. As entrepreneurs and business people we are used to working smarter and not harder (some people seem to resent that concept).

Reply to the comment left by "Saeef Khan" at "07/12/2015 - 08:49":

For the record, your ability to claim s162 incorporation relief has very little to do with whether you use the services of a letting agent or property manager. There is no reference to this in the HMRC guidelines whatsoever.

The important thing is that you are seen to be running a "business". The accepted position on this is that you (or a direct employee, NOT an agent) spends at least 20 hours a week running the property rental business.

Now if you only own a few flats, work full time elsewhere and use a property manager it is going to be impossible to demonstrate that you are investing 20 hours a week into the running of a "business".

On the other hand, if you have a very large property portfolio you may very well employ people and work on the business for more than 20 hours a week despite utilising the services of a property manager. Every case is different.
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