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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Comments: 96
1:14 PM, 14th July 2015, About 11 years ago
to do so*
Member Since July 2013 - Comments: 1264 - Articles: 1
1:17 PM, 14th July 2015, About 11 years ago
I think that would be tax fraud if it reduces your tax liability
Member Since October 2013 - Comments: 1020 - Articles: 47
1:20 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Gary Mason” at “14/07/2015 – 12:45“:
Hi Gary
Yes, you understand the impact all right.
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:25 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Puzzler ” at “14/07/2015 – 13:17“:
Which comment were you responding to please?
Tax avoidance is perfectly legal, tax evasion is not.
Here’s the case law …
“Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax” (IRC v Duke of Westminster [ 1936 ] AC1 (HL)). IRC v Duke of Westminster (1936)
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Member Since March 2015 - Comments: 40
1:28 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Gary Mason” at “14/07/2015 – 13:06“:
Hey Gary,
I’m going to show you the taxable pay changes but i don’#t have the time to do a full tax calculation.
Old way
20K job income
150K rental income less costs of = 110K (interest + costs)
Taxable income 60K
Then it’s tax as normal with all the banding and personal allowances.
New way
20K job income
150K rental income less costs of = 40K( costs)
Taxable income 130K
work out the tax using normal bands
then apply interest relief 20% of 70K
income – relief = 130 – 14 =
116K
Then it’s tax as normal with all the banding and personal allowances.
as you can see as the relief is a maximum of 20% if you never go into the 40% band you would not have an increase in tax. However they are using confusing terminology by telling you it depends on which band you are in, because they have changed how the bands are worked out. So you could be in the 20% bracket now and think yeah I have nothing to worry about however, if you are now pushed into the 40% band you do.
Hopefully this helps.
Member Since October 2013 - Comments: 1020 - Articles: 47
1:29 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Monty Bodkin” at “14/07/2015 – 12:29“:
Hi Monty
I do not believe that the law compels us to claim an expense. If we did not claim a legitimate expense we would pay more tax.
But, as Gary has already pointed out, you would lose the 20% relief if you did not claim your interest.
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:31 PM, 14th July 2015, About 11 years ago
As a follow on to the restructure strategy involving the creation of a head lease which I shared in comments on this thread yesterday, and for those of you still following this thread, you may well be interested to read my my write up that will appear in our Newsletter tomorrow – link below.
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Member Since July 2013 - Comments: 1264 - Articles: 1
1:31 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Mark Alexander” at “14/07/2015 – 13:25“:
I was responding to the comment that said you could simply not declare your mortgage costs. I believe not declaring something which is taxable is fraud.
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:34 PM, 14th July 2015, About 11 years ago
Reply to the comment left by “Puzzler ” at “14/07/2015 – 13:31“:
Mortgage costs are not taxable, either now or under the new proposals.
Failing to declare them would be madness though because the 20% tax relief would be lost.
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Comments: 118
1:36 PM, 14th July 2015, About 11 years ago
Any benefit, concession, allowance or financial activity that a Landlord is involved in that has a relationship with income, or “declared” will need to be looked at as this will have far reaching implications …as we are slowly exploring here.
Credit card companies will now be giving out crazy high credit limits now as declared income for Landlords is about to leap ! …great for any stoozers out there !
To artificially inflate Landlord income is a crazy thing to do, from all angles as far as i can see..