Summer Budget 2015 – Landlords Reactions

Theresa May said in her conference speech that she, like all Conservatives, is for low tax.

We should all write to her on this point in reference to Clause 24.
And I mean WRITE, not email

Does anyone have her address?

Kate Faulkner has put her recent BBC interview online:

http://www.propertychecklists.co.uk/articles/landlord-tax-changes-bbc-breakfast

Below it is a very interesting article.

Theresa May's address?

10 Downing Street, London. SW1A 2AA

Also worth noting that the legislation does not introduce any new tax: it disallows the application of tax relief for finance costs and introduces a new tax credit for such costs set, initially, at 20%

If the government is levelling the btl playing field between corporate & unincorporated businesses, might one expect the tax credit rate to be reduced as corporation tax falls?

I think Cherie took on a case that she only ever believed she had a very small chance of winning. I base that partly on the view of one prominent tax QC (given it is a tax matter, I think a tax QC is a better place to start than most other places) who opined very early on that the JR route would fail.

I am no more qualified than Michael to comment on any basis for a future legal challenge, but I wouldn't like to bet my business on the courts overturning primary legislation before April 2017.

Reply to the comment left by "Jon Pipllman" at "08/10/2016 - 09:52":

Thank you once more for your contribution. With your scaremongering and negativity what an asset you are.

Reply to the comment left by "Dr Rosalind Beck" at "08/10/2016 - 10:09":

Dr Rosalind Beck, Jon was born to produce "Pearl Of Wisdom"

Reply to the comment left by "Jon Pipllman" at "08/10/2016 - 09:32":

I do not think writing directly to Theresa May @ 10 Downing Street will have much effect as she probably won't even see the letters and they will again be passed directly onto the Treasury.

The only people she is obliged to personally reply to are her constituents of Maidenhead - I think (as already suggested by Chris & Steve ) we need to mobilise as many people in Maidenhead & also Philip Hammond's constituency of Runnymede and Weybridge - My Partner has already been to see Philip Hammond and we are at present setting up a follow-up meeting. So we need to mobilise as many landlords as we can in these constituencies.

I have also joined the Conservative Party - So that we can all approach our MP's from with-in the party & then they will know that my vote will influence their re-selection next time it comes round. I suspect the majority of landlords are already Conservative voters. (obviously I have no basis for this- just my personal opinion).

I will be trying to highlight All of the obvious contradictions - of Theresa May's vision for the country, i.e. :
"Our society should work for everyone"
"Our economy should work for everyone"
"Our democracy should work for everyone"

Furthermore, Ironically, one of the Pledges of the conservative party was to "Simplify the UK Tax System" & to this end, in 2010 they (HM Treasury, George Osborne MP, & David Gauke MP) set up the Office of Tax Simplification !!!!!!

Please see below the Press release from 2010 :

https://www.gov.uk/government/news/office-of-tax-simplification

Maybe contributors to this forum would like to approach Lord Howe and all of the other people involved in setting up this Office.

Balance, not scaremongering. Realism, not negativity.

Before deciding whether to support the JR or not, I noted the informal & publicly stated opinion of a specialist tax QC. That advice was that the JR was certain to fail. I took his word over that of Cherie Blair QC who, at best, could be described as having a vested interest in talking up the prospects of the case.

Seeking to overturn primary legislation, that could easily be redrafted to achieve the same end by 1000 different means, was always going to be a tough call. Anyone claiming otherwise was & is, simply, wrong. It might happen, but it probably won't.

Highly leveraged interest only investing in assets has always carried risk and will always carry risk. Some would say that any highly leveraged investment was lucky to survive the financial crash and that 'BTL' has, therefore, had a bonus 8 years already.

'BTL' i.e. highly leveraged IO borrowing to buy houses and MEW into a rising market to buy more at equally high leverage, came into being by an unusual set of circumstances and it has survived (for 20 years now) due to further combinations of circumstances that can only ever be described as extraordinary. That it might last for ever plays contrary to any educated view of basic investment principles.

Those of us that have had the opportunity to participate in the market in some / all of the last 20 years should be grateful for that. Sure, we can be disappointed and even angry that the market is being changed by government interference. But it was bound to end sooner or later somehow anyway. It is time to look forwards to new opportunities.

It would be wrong of me to not to feel sympathy for those affected - I do. Much more so for tenants - many thousands of who will end up living in temporary accommodation / B&B for significant periods of time (& at great short term costs to the taxpayer) - than for LLs that might go from being on paper millionaires to being skint, but all affected do have some sympathy from me.

Pragmatically though, that's life. Things change and people with extreme positions of any sort are always at risk that a change might come their way. When that happens, the extremity of the position magnifies the impact of the change. That isn't an anti BTL LL view, it is "Life 101."

If, with the announcement of S24 / additional SDLT / PRA / Basel III, the only option that would save a LL's position was to chip in a few hundred quid to a crowd funded legal action and write a few letters with a view to quickly & easily overturning primary legislation, then the outlook is very bleak just now.

It isn't for me to judge anyone for pursuing that option. But I don't hold back from saying that anyone wholly reliant on only a favourable outcome from that single option, was going to come unstuck one way or another anyway, sooner or later.

Anyone in that position does personally have my sympathy. But maybe it is time to consider what other tactics MUST be employed to minimise the damage that the forthcoming changes might make. Many have been discussed here and the implementation of some of them even documented, in minute detail, right here on this very forum.

My only advice, FWIW (not much I know), is this. If the enactment of all the changes so far announced will be catastrophic to your own situation if you do nothing, then to do something now, whilst you have control. No one really wants HMRC, their lenders, an LPA or OR to end up forcing their hand.

View forcing the government to backtrack on primary legislation as a bonus if it happens, rather than the only thing that you are building the rest of your life on.

I wish I had something more positive to offer to the worst affected.

I have been planning for a year expecing this will happen I agree that a U turn at the minute is unlikely but I am a business person and there are always opportunities to be expolored, buy to let in its current form is dead and to have all your eggs in one basket is risky now at best. The good thing is due to this forum we are the lucky ones who can at least plan many will not have this luxury. Section 24 is coming but I am 100% convinced once it unravels with a lot of casualties it will be stopped as it is quite simply unworkable the sums just don't add up. One thing I cannot accept as you put it John as this is life get on with it that doesn't wash. interest rate rises, fall in prices / demand non paying tenants etc they are life not being taxed on finance costs with no clear exit it is plain wrong and unjust especially having the goal posts moved knowing u cannot adapt with it i.e. Incorporate which is not an option for many that isn't life it is an blatant abuse of power that shouldn't happen in any democratic country

I agree NW Landlord that such changes shouldn't happen - particularly when they are applied retrospectively (that is where the injustice is most felt).

That said other industries / professions / investments have been legislated out of existence previously (and others will be in future), so the precedent was - sort of - there.