Summer Budget 2015 – Landlords Reactions

@BTL IS

In one of your posts there’s a reference in a letter to GO from Andrew Tyrie, Chairman of the Treasury Committee, he mention a report from the Treasury Committee in 2011 titled ” Principles of Tax Policy” and set out the 6 principles that tax policy should :
1. be fair;
2. support growth and encourage competition;
3. provide certainty;
4. provide stability;
5. be practicable; and
6. be coherent.

I think the proposed tax change fails on all 6 principles. I will be adding this to my notes for my MP meeting.

I suggest anyone else meeting their own MP cite these principles as well.

Hi Jerry,

Even if we could use the so called CGT rollover relief, our current lenders would not allow a straight forward port from an individual to an limited company as they are completely separate entities under law. We would have apply for new lending, which as far as I’m aware has quite high reversionary interest rates at the moment. Plus most lenders would require capital repayment rather than interest only. Also, I believe that your limited company would have to hold the funds for deposit i.e. if your portfolio is worth £1M and you require £700k funding, your own limited company would need £300k of own funds to complete the transaction… plus stamp duty, legal fees and survey fees etc. The only way around this that I can think of is to find a bank which will allow you to purchase your own properties within the limited company via a bridging loan and then immediately refinance to the bank based on the required LTV. As another previous comment said, there is no guarantee that the next government will not decide to withdraw all interest costs from individuals and companies. In my eyes its a pointless and costly exercise.

Reply to the comment left by “Manchester Landlord” at “01/09/2015 – 14:38“:

Sounds as if the recipient should tell his MP he is talking through his hat, then!

Reply to the comment left by “Barry Fitzpatrick” at “01/09/2015 – 14:32“:

Excellent research Barry, for those interested, here is a link to the report and to a report with comments from the Chartered Institute of Taxation.

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtreasy/753/753.pdf

http://www.tax.org.uk/Resources/CIOT/Documents/2011/05/Treas_TaxPolicy%20_%20Budget11.pdf

Reply to the comment left by “Ros .” at “01/09/2015 – 14:08“:

When they offer advice from the tax team, you know they’re trying to capitalise on this. Estate agents and lettings offices need buy to let to thrive; to cause mass panic would put them in danger, too. However, they will adapt and survive this either way.

Just got a response from my MP’s secretary…

Further to your correspondence, Sir Gerald has asked me to look into the status of your case. I can confirm that Sir Gerald sent a letter to the Financial Secretary to the Treasury on 28th July but, regrettably, we have not yet received his response.

I have today placed an urgent request with the Minister’s Office for a response to the important points you have raised and hope to hear back from him shortly.

In the meantime, please be assured that Sir Gerald will be in contact with you again just as soon as he receives the Minister’s reply.

… and here’s a response from one of my tenants after my slightly “long-winded” email I posted earlier …

Yes I’m aware of this and find it to be very bad news for so many people. I have completed this and also sent it to a few friends in London who rent out property.

Hope this doesn’t go ahead

Reply to the comment left by “Ian Simpson” at “01/09/2015 – 18:51“:

Would your tenant like to be famous, picture in a National Newspaper, possibly on breakfast TV etc.?
.

http://www.accountancyage.com/aa/analysis/2424080/analysis-brits-could-take-heed-from-aussie-buy-to-let-tax-concerns

Great article, which seems to suggest that, Australia attempted to abolish negative gearing however, it was abolished within 2 years of implementation…it further suggests that, perhaps UK should take a heed from Britain.

Analysis: Brits could take heed from Aussie buy-to-let tax concerns

http://www.accountancyage.com/aa/analysis/2424080/analysis-brits-could-take-heed-from-aussie-buy-to-let-tax-concerns