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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Member Since July 2015 - Comments: 393
11:46 AM, 13th November 2015, About 10 years ago
Reply to the comment left by “Simon ” at “13/11/2015 – 11:21“:
Obviously, if the profit after repairs and other allowed expenses is enough to push them into the higher tax band – just the same as getting a second job, really.
The difference between the cash purchase doing that and a purchase with a mortgage is that, with the cash purchase, it’s the actual profit but with a mortgage it’s a “deemed” income that ignores the finance costs so you could pay more tax and actually “earn” less than without the BTL (oversimplified, but that’s the general idea).
Member Since August 2013 - Comments: 108
12:46 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Kathy Evans” at “13/11/2015 – 11:46“:
Thanks Kathy, seems a bit pointless then unless via a ltd
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:50 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Kathy Evans” at “13/11/2015 – 11:46“:
Hi Kathy
You wouldn’t pay more tax with a BTL mortgage, in fact you’d pay less because you’d still get 20% tax relief on the mortgage.
However, your effective rate of tax would be much higher that a higher rate tax landlord with no mortgage at all, as much as an infinite percentage if you made a loss in real terms.
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Member Since August 2013 - Comments: 108
1:47 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Mark Alexander” at “13/11/2015 – 12:50“:
Hi Mark seems pointless doing buy to let even with a mortgage as surely all the expenses (mortgage interest) must be deductible to work ?
Comments: 297 - Articles: 1
1:57 PM, 13th November 2015, About 10 years ago
High yield, low value is still viable in smallish portfolios
Member Since January 2011 - Comments: 12193 - Articles: 1395
1:59 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Simon ” at “13/11/2015 – 13:47“:
Not necessarily, it’s still a number crunching exercise on a case by case at the end of the day.
I’ve read various articles and comments suggesting that BTL will not be viable at 75% LTV after these changes. Some of these articles and comments were even wqritten by credible sources including landlords associations.
Well I sorry but that’s complete B.S.!
LTV has noting to do with with cashflow viability.
There are low yielding properties which don’t stack up in terms of cashflow at even 50% LTV before the changes, never mind 75% LTV. On the other hand, there are some high yielding properties which would still stack up at 100% LTV with no tax relief whatsoever.
Think about it like this. If you had a property with a 50% LTV mortgage today, but tomorrow the property halved in value but everything else stayed the same, you would be at 100% LTV wouldn’t you? The viability of your investment from a cashflow perspective wouldn’t have changed though would it?
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Member Since March 2014 - Comments: 31
2:08 PM, 13th November 2015, About 10 years ago
Hi mark my son is interested in the tax consultancy but I have one question if the LTV is over 75% are there still the same options as some of his portfolio is with Mx and quite highly geared whilst the rest is less
Member Since August 2015 - Comments: 287
2:58 PM, 13th November 2015, About 10 years ago
> Mark A.
On a cashflow basis it might still stack up.
But could the property halving in value / doubling the LTV cause an LTV clause in the mortgage to trigger a demand for repayment from the lender in some cases?
Member Since January 2011 - Comments: 12193 - Articles: 1395
3:02 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Jon Pipllman” at “13/11/2015 – 14:58“:
Yes of course it could, but very few BTL mortgages have such a clause in the T&C’s.
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Member Since January 2011 - Comments: 12193 - Articles: 1395
3:05 PM, 13th November 2015, About 10 years ago
Reply to the comment left by “Maria O’Neill” at “13/11/2015 – 14:08“:
Hi Maria
The <50% LTV options and also the more general planning would still be available. However, incorporation is an "all or nothing" scenario if CGT and SDLT is to be avoided.
Without fully understanding your sons personal and financial situation it is impossible for me to make recommendations that are personal to him, hence the need for the consultancy.
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