Government plots raid on landlords to plug £50bn black hole

FFS this is getting ridiculous.

If there is anyone NOT selling at the moment...a rethink is in order!

Or you could look at incorporation into your own Ltd Co, and then look to prune your portfolio.
Any CGT would be rolled-over into company shares and sales post-incorporation would attract Corp Tax only on any profit from the rebased MV at incorporation date.

If you prune your portfolio and Corp Tax is only due on the profit above the incorporation value how does the incorporated equity get drawn out of the company ?

". . .the Government now looks to take a bigger slice of the profits made when selling." Many of us, however, will ask "What profits? Depending on timings of buying and selling, landlords in parts of the country have seen little or no capital appreciation over and above the rate of inflation since we purchased. We will be taxed not on actual real terms profits but on paper profits, that is money which buys much less now than when we bought the properties. Another stealth tax.

Potentially adding further fuel to the already 'at critical mass' rental homes shortage would be astonishing! Am more and more beginning to think the relentless attack on the PRS sector is part of a hidden agenda - surely our expert ministers and policy makers cannot be this incompetent?

Reply to the comment left by mark smith at 07/11/2022 - 11:04
It's going to cost me to transfer into a Ltd co.
Corp Tax is looking likely to be hit also. In the interim HMRC will be flagged by yet another Ltd company being established, so the sniffer dogs will be out... more time spend trying to keep ahead of the tax game. It's becoming draining. Everyone loosing sight of the fact we rent property to PEOPLE.

Is this what its come to? Making all LL's feel like we now have to live up the the shifty, tax dodging companies headed by faceless con men 'lording over tenants to squeeze as much out of them as possible' ideology that's being continually pumped through the media?

For what? Kill of the small LL and it will be replaced by exactly that as the norm!

Ultimately this is not all about tax. Its about the way the PRS is being decimated to the point, I actually feel its time to just leave, in fact not leave - get out. There is a difference. a big difference.

You cant raise the rent, you cant evict a tenant, you cant get mortgage relief, more tax, little profit and yet higher fines and prosecution. The thought of ensuring my rental properties 'make the enviro grade' means that I'll be spending money making these properties BETTER that my own! No problem if the tenants can pay the increase over time, but they can't! Bloody madness.

Good landlords with perfectly fine houses are being made to feel criminalised for just renting out property. While this mantra continues nothing will change.

Like it or not we will all become those horrible LL's of the past - because the government is making us all behave that way just to survive.

Reply to the comment left by mark smith at 07/11/2022 - 11:04
Hi Mark as you will know it’s not always as simple as that. There are thousands of landlords like me who bought houses 20 or 30 years ago and it’s impossible now to incorporate them because of the stamp duty and CGT implications. Because of the original purchase price compared to the current value (and lending) we are not eligible for any incorporation relief. I’ve looked into so many different ways of mitigating the effects of section 24 but in my own case our bank has advised that if I attempt to do this it will be classed as tax avoidance and they will close our accounts and Mortgages! The only way I can realistically mitigate the financial impact is to raise rents to the maximum that the market will stand and I’m in the process of doing that so that at least if there is a rent freeze they will be frozen at increased rates. I feel genuinely sorry for tenants that are having to pay the price of the government hammering of the PRS. I certainly don’t expect any sympathy, and I know landlords don’t get any, so all we can do is either deal with the constant barrage of challenges that the government throw at us or choose to sell up. For those of us that stick it out and are in it for the long run hopefully it will be worth all the stress.

Reply to the comment left by mark smith at 07/11/2022 - 11:04
Not a viable option if you only have 1 or 2 properties. Viable option for portfolio landlords

Reply to the comment left by Old Mrs Landlord at 07/11/2022 - 11:18
Exactly this! I have been selling one a year. Some sold well, others less so. The one I'm hanging on to is a super property, but the entire area has seen very little capital appreciation in the last 10 years.

Reply to the comment left by DSR at 07/11/2022 - 11:38
Without a doubt it will cost to set up in a LTD Co as Mark Smith suggests. The big question is

"How much (many £1,000's I would think) will it cost if you do/we don't set up in a LTD Co?"