Summer Budget 2015 – Landlords Reactions

by Mark Alexander

14:00 PM, 8th July 2015
About 4 years ago

Summer Budget 2015 – Landlords Reactions

Make Text Bigger
Summer Budget 2015 – Landlords Reactions

Budget 2015 - Landlords Reactions

The concern is;

Budget proposals to “restrict finance cost relief to individual landlords”Summer Budget 2015 - Landlords Reactions

To calculate the impact of this policy on your personal finances download this software



Comments

Claire Oswald

18:51 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "Romain Garcin" at "08/07/2015 - 18:20":

It is relevant as if you pay tax at the 40% rate, the interest will only attract 20% relief (so you pay tax on the other 20% of the profit). If you only pay 20% tax on everything you earn there is no issue, it's those who slide into the 40% tax band.

Joe Bloggs

18:55 PM, 8th July 2015
About 4 years ago

gutted about the loss of the 10% w&t allowance. it was simple and could not be abused. the new allowance will be more costly in time and accounting and open to lots of abuse. a silly retrograde step. george osborn has morphed into gordon brown!

Mark Alexander

18:56 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "gary dave" at "08/07/2015 - 17:37":

Gary, based on the example you provided you would be £1,440 per annum worse off
.

Monty Bodkin

19:03 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "Lou Valdini" at "08/07/2015 - 18:22":

The loss of the 10% W/T allowance really piles on the pain.

I agree Lou.

Fully furnished encourages movement of labour, Core Tory values. What landlord will offer fully furnished professional rentals now?

Anyone (used) to do student lets?

Romain Garcin

19:03 PM, 8th July 2015
About 4 years ago

HI Joe and Neil,

Thanks for this.

The issue is that currently everyone can deduct 100% of the interests from the income in order to work out the taxable profit.
So, to me "Post Budget the amount you will be able to offset against taxable income will be no more than if you were in the 20% bracket even if you are a higher rate tax payer" does not mean anything.

Now, perhaps they mean that if I get £1000 in rent I should pay £200 or £400 in tax. But I can the £1000 I paid in interests so I 'save' (is that the so-called 'tax-relief') these £200 or £400.
So if they want landlords in the 40% tax bracket to only save £200 it could mean that, in effect, those landlords will now only be able to claim HALF of the interests paid as allowable expense.

Claire Oswald

19:08 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "Romain Garcin" at "08/07/2015 - 19:03":

Yes, in that case you would be £200 worse off a year.

Romain Garcin

19:12 PM, 8th July 2015
About 4 years ago

But then you can be liable for tax even if you haven't made any profit, or even if you have made a loss. Nice.

Mark Alexander

19:14 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "Romain Garcin" at "08/07/2015 - 19:12":

I think you've got it now Romain
.

Claire Oswald

19:14 PM, 8th July 2015
About 4 years ago

I think some of the difficulty arising from this is the wording. Currently, mortgage interest attracts relief at whatever tax rate you are paying (so seen as being able to offset 100% of the cost), in the future it will only attract relief at 20% (so in the 40% tax band you will effectively only be offsetting 50% of the interest - note it's more complicated if your earnings straddle a tax band which is likely).

Mark Alexander

19:18 PM, 8th July 2015
About 4 years ago

Reply to the comment left by "Claire Oswald" at "08/07/2015 - 19:14":

I agree Claire .... and perhaps HMRC will now change it's strapline ........... "Tax doesn't have to be taxing"......... YEAH RIGHT!!!
.

1 3 4 5 962

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Mark Smith (Barrister-At-Law) Landlord tax planning strategies - Bournemouth

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More