Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "kathleen drea" at "13/07/2015 - 17:40":

That’s what we already have, and I think your way of looking at it was the same way the Chancellor looked at it without thinking through the consequences, which I have now spelled out.
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Reply to the comment left by "Neil Patterson" at "08/12/2012 - 14:50":

Of course following the budget we have been taking calls from existing and new landlords on how to address the issue of tax..

Now whilst I am not an accountant, I do have years of experience working with landlords and many of them will not be effected by the budget.

This is because they took expert advise at the outset on how to hold the property and the type of funding to use.

So if you are still feeling the shock waves of last week and need some refreshing advise do let me know.

Reply to the comment left by "James London" at "13/07/2015 - 17:13":

Hi James

I cannot give advice on whether you should buy another property. However, what I can say is that you are already in the 40% tax band. So your existing interest will be subject to the new levy at 20%. Are you willing to pay a 20% levy on the interest for the fourth property (assuming you still have 4 in 2020/21)?.

If you bought a property through a company, the interest would not be subject to the levy under the current proposals, but you would need to take professional advice as to whether having a company would be worthwhile..

Reply to the comment left by "Simone Gilks (Mortgage Adviser)" at "13/07/2015 - 18:11":

On the outset of the budget announcement, or the outset of them purchasing their properties??

I have been talking to one property expert who has told me that, this legislation is only in draft...although it may get implemented in full but finer details will be decided in due course.

He seems to think that, recent warning from Bank Of England that buy to let debt is sitting on ticking time bomb" has triggered this decision to deter lenders as well as buy to let buyers to stop them going ballstic as they were or have been transacting on this business at unsustainable level.

On a positive note, (although do not hold your breath on it) there might be some light at the end of tunnel according to this expert. As treasury may decide to impose this tax only only those who have purchased post April 2017 therefore as long as any new purchases are concerned should be bought by proper tax planning such as buying through ltd companies.

Existing properties can be transferred however by making transfer you will be making huge losses by paying CGT @ 28% therefore it would negate any benefit of doing so.

If you recall, Chancellor abolished non-resident Tax loophole back in December 2013, which became effective in April 2015 and first glance it felt it is retrospective however, when this tax got implemented it was only applicable after April 2015 which meant, if you left country after this date, for 4 years and 1 day you would wipe out any tax liability therefore any gains you have accrued prior to this date would still remain Tax free regardless of when you became Non-Resident.

I'm sure, Chancellor is unlikely to do something as silly as it has been suggested...I know it is wishful thinking but I am rather optimistic.

Reply to the comment left by "kathleen drea" at "13/07/2015 - 17:40":

Hi Kathleen

Your approach, of adding 20% or 25% of the finance costs to the amount of tax calculated would have the advantage of showing clearly that it is a levy. However, we would be no better off. We need to get the whole idea scrapped.

Reply to the comment left by "Gary Mason" at "13/07/2015 - 18:42":

That would be good news indeed, it was also one of the suggestions I made in the open letter to my MP 😉
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HI All

I just laughed my head off no expert would have known that the government would have brought in these changes. Considering a lot of these people own BTL property themselves it is quite a surprise.

I have met people who where told this or that by experts. Many now facing very difficult times. If it was not for the low interest rates in the last few years many would have been out of business, there is no exact way in property. With hindsight you can always be right even then some would get it wrong.

I know people with one or two properties told to hold in a company when the cost far out weighed the gain at the time. Others with very large portfolios told best to be individually owned.

I am sure if no one really expected the government to do this.

Reply to the comment left by "Simone Gilks (Mortgage Adviser)" at "13/07/2015 - 18:11":

"affected" , "advice".

But you are not a business. You are a private investor! Set up a limited company and then you are a proper business and not an investor.