New landlord tax rules for new debt only

The link isn't working for me unfortunately

I have to disagree it should not be allowed full stop on new or existing debt. If this is allowed I can see it get rolled out to all tax bands.
A simpler way to slow the market down would be to make all new loans have to stack up on a repayment basis and not to allow equity release.

Mark your suggestion on it being non retrospective is spot on.

I would add though that the possible "turnover tax " effect for many of us who break even or make a small annual loss is also a very major shift in general tax principles and should scare the hell out of all business groups who use finance.Perhaps we can flag this up to other business groups/associations...There is some treasury stuff
also available that may actually assist see below,,,

Check out the Treasury Committee oral evidencer enquires into the budget ..UK parliament website.15th July questioningof Prof. Booth and others.QUOTE in answer to Question12..."...limiting tax relief to some extent on one particular type of business does not make any sense at all to me."......and a little further on q13..answer from Jonathon Portes (Director Nat. Institute of Economic research AND SOCIAL RESEARCH),,,.....Quote..." I agree with Philip, you do not solve the serious structural problem of the lack of supply in the UK housing market by messing around with demand mostly in ways that will tend to increase demand"...

and again whilst answering q 10..Prof. Booth...quote "This was not an economists budget,I can tell you"............So its not just landlords that see no logic in all this.

I would like to qualify "new debt" as being new property purchases. Thereby allowing re-financing of properties to release equity.

To keep the message simple therefore "New tax rules for new property purchases".

If anyone needs the name, address and email address of their local Tory there is a filterable list of MPs at the house of Commons website. I filtered by Conservative Party and the link is here –

http://www.parliament.uk/mps-lords-and-offices/mps/?sort=3&type=4

This may help you contact your local MP

The slogan sounds good (if we are accepting the governments wish to kill the rise of buy to let) as long as "new debt" is a meant as additional debt and not changing the product or provider of existing debt.

With regards to the stated aim of making things easier for first time buyers:

Forcing severely higher costs onto business owners like this will inevitably cause some property businesses to go under, and this will mean eviction of thousands of innocent tenants and those properties are sold off or repossessed.

This may indeed create opportunities for bargain properties, but they will more likely be snatched up by wealthier cash buyers rather than first time buyers, who will still be kept out of the market.

Will it create new homes? No! So all this distress will do is destroyed family businesses, ruin pension plans, and cause the change of ownership and occupancy of the same number of dwellings.

Picking this one industry (private rented sector) to change the taxation rules of financing is a distortion and doomed to fail, but causing untold anguish and distress, homelessness and misery in the meantime.

Wait, it gets worse … much worse, the higher your LTV gearing ratio …

Mark Carney (head of the Bank of England) has already started hinting at a base rate rise in the next 12 months. If you took the current average interest rate of your portfolio to be say 2.5%, then even a rise of 0.5% of the base rate will case our interest costs to jump by one fifth (20%).

But you would only get relief on 20% of that rise, i.e. you have to swallow 80% of the 20% rise, which means that even 0.5% on the base rate would raise your unrelieved interest costs by 16% in this example. Less income plus higher taxes.

Gosh, does that increased net income now push you into the next 40/45% tax band too? Oh dear!

Reply to the comment left by "Richard Peeters" at "23/07/2015 - 14:44":

Hi Richard

The change does not mean that we will pay tax on 80% of the interest.

The interest will not deducted from the rents received, so the rental profit will appear to be that much higher, by 100% of the interest. This higher profit is added to all your other income, then the tax is calculated by proceeding through the various tax bands.

Then finally 20% of the interest is given as a relief and deducted from the tax that was calculated, and you then owe HMRC the remainder.

So tax is calculated on the amount of the interest at up to 40% (or 45% if your total income exceeds £150,000), then 20% of the interest is deducted. The effect is that you pay up to 25% of the interest amount in extra tax.

Reply to the comment left by "Appalled Landlord" at "23/07/2015 - 15:55":

Good explanation, I concur
.