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”. 
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Budget 2015 Campaign
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Member Since August 2014 - Comments: 36
11:11 AM, 9th July 2015, About 11 years ago
Can I ask a quick question? Do they new rules just relate to specific BTL mortgages? What about if the mortgage is standard residential (with lenders permission), can the interest element still be offset 100%?
Or are they just targeting the interest only BTLs?
Member Since July 2015 - Comments: 24
11:16 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Claire Oswald” at “09/07/2015 – 11:11“:
Would apply in the senario you describe as well claire.
Member Since August 2014 - Comments: 36
11:32 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Ewan Murray” at “09/07/2015 – 11:16“:
Well that’s rubbish. Better quit the day job…
Member Since September 2013 - Comments: 217
11:33 AM, 9th July 2015, About 11 years ago
What amazes me having read some responses is that a significant number of posters do not understand the business that they are in!! Forgive me if someone else has posted but the change, silly though it is, is this:
Your income is £1000
Your non finance costs are £500
Profit on business excluding finance cost is £500
You get taxed on £500 at your marginal tax rate say 40% tax = £200
Your finance cost (interest) is £500
You get a 20% tax rebate £100
Net tax bill £200- £100 = £100
But you made no profit!
Now the interesting thing is, but I have not seen any comment, is that company accounts work in the normal way. No profit no tax.
Of course in the above I ignored the impact of the 10% furniture expense. That also hits the profit too!
Has anybody posted on merits of buying in a company yet?
Member Since August 2014 - Comments: 36
11:45 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Mike W” at “09/07/2015 – 11:33“:
Yes, I believe that has been mentioned.
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:47 AM, 9th July 2015, About 11 years ago
Reply to the comment left by “Mike W” at “09/07/2015 – 11:33“:
Buying in a company now makes more sense than ever before.
Moving current assets into a limited company structure is fraught with tax complications including the potential for CGT and SDLT.
.
Member Since July 2015 - Comments: 13
12:05 PM, 9th July 2015, About 11 years ago
Reply to the comment left by “Mark Alexander” at “09/07/2015 – 11:47“:
Mark,
If you move these assets into a Ltd company how does this impact your ability to buy further BTLs? Presumably if you had a few BTLs in an Ltd and wanted to buy a further BTL within that entity then lenders would expect the company to have the ability to fund the purchase rather than you as an individual, therefore would they require the limited company to achieve a certain level or profit before giving you a mortgage. E.g. some of the buy to let mortgages I have required me to have a minimum personal income not including buy to lets of at least £50k. I think this would be a contentious point for lenders if you tried to buy through a Ltd.
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:11 PM, 9th July 2015, About 11 years ago
Reply to the comment left by “gary dave” at “09/07/2015 – 12:05“:
Yes, possibly, and especially if all of your income comes from rental profit and that’s all in the company.
If you have earned income of more than £25,000 on top of your rental profits it’s not so much of a problem.
Also, the lenders who lend to companies tend not to have minimum income requirements either.
As I said though, there are complications of switching an existing property portfolio owned personally into a company structure, not least of which is SDLT and CGT implication. Then you also have to consider audit and accountancy costs and the fact that there are less lenders who provide BTL funding to limited companies, hence the inevitable increase in price.
.
Member Since May 2014 - Comments: 145
12:59 PM, 9th July 2015, About 11 years ago
Reply to the comment left by “robert reinhart” at “08/07/2015 – 23:06“:
You would be paying £20,000 tax
Member Since October 2014 - Comments: 274
1:09 PM, 9th July 2015, About 11 years ago
Reply to the comment left by “Mike W” at “09/07/2015 – 11:33“:
Best example yet of how this will work.