Summer Budget 2015 – Landlords Reactions
2:00 PM, 8th July 2015, 11 years ago
9619
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The concern is;
Budget proposals to “restrict finance cost relief to individual landlords”. 
To calculate the impact of this policy on your personal finances download this software
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Budget 2015 Campaign
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Member Since July 2015 - Comments: 24
8:46 AM, 9th July 2015, About 11 years ago
The restriction applying to finance fees (which we pay more of) is particularly painful.
Member Since February 2011 - Comments: 3453 - Articles: 286
8:47 AM, 9th July 2015, About 11 years ago
Hi there,
If anyone is struggling with the maths and are a high rate tax payer please see our new article and calculator that will show the amounts involved for you.
>> https://www.property118.com/chancellor-hits-landlords-for-billions-how-will-this-affect-your-cashflow/76185/
Member Since July 2015 - Comments: 13
9:05 AM, 9th July 2015, About 11 years ago
I take it this is going to apply in Scotland as well?
Member Since July 2015 - Comments: 24
9:16 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “gary dave” at “09/07/2015 – 09:05“:
Yes.
If scotland moved to full fiscal autonomy model over rime there could be differently.
I don’t see a more favourable tax position for btl in scotland compared to rest of uk emerging though.
Member Since July 2013 - Comments: 15
9:29 AM, 9th July 2015, About 11 years ago
Potential loophole – What about taking a personal loan and using that to settle the existing mortgage. Loans that are used fully against the property are a cost and tax deductible.
Glad I wrapped most of my properties in a LTD company back in 2005 ….the ones I did not were going to cost too much CGT.
Another way to get the money back is to dump cash in your pension and get the 40% back that way.
Member Since September 2014 - Comments: 20
9:31 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Y L Newbury ” at “08/07/2015 – 15:39“:
That is a brilliant point and you do indeed have to look at the totality of the changes.
I rely on the wear and tear allowance to bring us either close to or under the higher tax band as many of my houses are student rental / furnished.
Member Since July 2015 - Comments: 13
9:36 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Ewan Murray” at “09/07/2015 – 09:16“:
Ewan,
It doesn’t require full fiscal autonomy. As part of Devomax Scotland will be given more power for independently raising tax approx 40%.
There is already a difference between stamp duty bandings between Scotland and rest of the UK.
Gary.
Member Since January 2011 - Comments: 12193 - Articles: 1395
9:41 AM, 9th July 2015, About 11 years ago
There has been a lot of discussion about moving property into limited companies.
What you need to remember though is that a transfer into a limited company is treated as a sale for CGT purposes.
If the property hasn’t increased in value too much this may well be worth doing.
If you take a longer term view it may be worth doing anyway because these taxes are only ever going to get worse because the CGT liability will rise with property values and income tax will rise in line with rents.
The best tax planning tool I have come across so far is utilisation of a declaration of trust between married spouses and civil partners, especially where one of the parties is a lower rate rate tax payer or doesn’t currently pay any income tax at all – see >>> http://buytoletconveyancing.co.uk/declaration-of-trust/
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Member Since July 2013 - Comments: 303
9:45 AM, 9th July 2015, About 11 years ago
Personal loan will of course attract interest and mostly higher rate than the mortgage rate.
The loan will be used to pay the mortgage off. so the restriction will apply. Besides Loan will be paying interest & capital in a shorter period say 5 year. This will affect your cash flow.
Member Since July 2013 - Comments: 303
10:27 AM, 9th July 2015, About 11 years ago
Some of the reason for the growth in BTL mortgage are.
a) Absurd new rules/MMR for personal mortgages.
b) Lack of interest only mortgages for personal mortgages.
c) BTL mortgages are un regulated.
d) Lenders charge a larger interest spread so are happy to offer it..
e) Where people despite of having a large deposit and even paying higher rents are not able to obtain personal mortgage are taking out BTL mortgages as a hedge against future price increases, while in the mean time they are waiting for change of circumstances or change in MMR rules.