Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Claire Oswald” at “10/07/2015 – 19:25“:

That’s insane !

Reply to the comment left by “Claire Oswald” at “10/07/2015 – 19:25“:

that is what i said :

£20% of the interest as an extra on the current tax bill of 0 (20% x£150k=30K)
my “rule” doesnt allow for the 43K at std rate as assumed to be already used in other income (salary etc), which is why they have quoted 21400 (30 less 8600 which is 20% of 43k) ….altho why they didnt go further and do the first 10600 at 0% i dont know….)

if 45% payer then 25% of interest is the extra on the tax bill. ..or thereabouts depending on allowances and other incomes

…and yes i agree ..insane.

Reply to the comment left by “Simon Dewsberry” at “10/07/2015 – 19:58“:

Apologies, I was just trying to make it crystal.

And yes, they appear to have forgotten about the personal allowance.

no need to apologise Claire …. I just hope i have understood it correctly !!!

Reply to the comment left by “Simon Dewsberry” at “10/07/2015 – 20:03“:

Lots of intelligent professional s on this site and me not being the sharpest tool in the box, the penny has dropped. This potentially is going to lead to a fire sale ! A property crash ? And sharp rises in rent. These must be the only consequences. Throughout I have understood it to be that 80% of interest is still claimable but just a fifth ?????
Pardon my French but …..&@€$¥#% !

Asif I don’t fully understand this but if only 20% of finance costs were allowable then most highly geared landlords would be going bankrupt. That would never be the intention. I rather think its this bit about higher rate tax earners having to pay 20% of their interest bill as “tax”by not being able to claim it. I hope that is the case anyway or us landlords will be visiting soup kitchens.

Reply to the comment left by “Gary Nock” at “10/07/2015 – 21:59“:

Gary, my understanding is that from 2020 only 20% of finance costs will be allowable.
Hence my previous examples/calculations. I have no idea what percentage of LL are very highly geared, but I really hope Asif is wrong about the fire sale. I don’t think any of us would wish to see that scenario developing

The Government has caused this confusion by using the wrong terminology – a terminology that we professional landlords don’t use. And this is because politicians often know nothing about business. They’re amateurs making decisions for the professionals. Hopefully, it will cleared up soon; what on earth they mean about tax relief… Maybe someone with connections can clarify once and for all if they are really referring to what we know as offsetting the interest payments as one of our main costs (often the main cost) of running our business.

Reply to the comment left by “Dom Glynn” at “10/07/2015 – 22:23“:

Dom the thing that I am hanging my hat on is that Osbourne says it only affects top rate taxpayers. If what you say is right it would affect ALL landlords. So the earlier explanations about 20% of the interest being added to tax bill for higher rate taxpayers seems right.

Reply to the comment left by “Gary Nock” at “10/07/2015 – 22:38“:

Gary, as I have said previously that’s what makes me wonder whether either my accountants or I have seriously misinterpreted the changes. Osbourne’s speech was so ambiguous to a tax layman like myself makes me wonder.
I really hope I’m wrong, but have a very nasty feeling I’m not.