Summer Budget 2015 – Landlords Reactions

IMPORTANT

I propose we keep this thread for “Landlords Reactions” only, by all means continue to analyse various scenario’s etc. here.

From now on please post all examples of your lobbying efforts and associated commentary on the “Open Letter to George Freeman” thread – see https://www.property118.com/open-letter-george-freeman-mp-conservative/76353/ – the more examples of letters to MP’s etc. posted on that thread, the more likely it is to inspire others to follow suit.

To make this work we need the help of our regulars. If you spot something on the wrong thread please click the “report to moderator button” and let us know. I have found a way to move comments from one thread to another but it isn’t simple. Therefore, it would be useful if avid followers of this particular thread would post a reminder of this message, perhaps 1 in every 10 posts.

Thanks in advance for you help and understanding.
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Reply to the comment left by “Michael Barnes” at “15/07/2015 – 09:49“:

Edits still not working.

Words in first paragraph should be
“It is this that we need to attack and correct if we are to get reasonable tax treatment”

I seem to remember the Institute for Fiscal Studies saying something about this too. I have to go out now, but maybe someone remembers more? I think they were on our side!

Reply to the comment left by “Michael Barnes” at “15/07/2015 – 09:52“:

Our web developers are working on fixing the edit functionality today, please bear with us and sorry for the inconvenience.
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PS – for those of you who have already been lobbying the ‘powers that be’, please post your correspondence HERE.
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Reply to the comment left by “Gary Mason” at “15/07/2015 – 09:50“:

Hi

I see we differ on how we think the calculation are done (this isn’t, for example, a maths error). As already stated one group believes that finance will no longer be deductible from your profits when calculating your tax liability. I believe this stems from the first sentence of

“Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Other other, including yourself, believe that the finance interest will be added to our tax liability regardless of property profit. Can you explain or quote what makes you think this is the case from the information that has been released so far?

Jason

Hi Again

From what I am understanding is the government is now saying your rent is income (as the case at present) and will be tax as that. less cost’s.

Form 2017 to 2020 you will no longer be able to subtract you mortgage interest payments to reduce your income.

So if you bring in £500 a month with cost of £100 and interest at £200 at present tax would be due on £200 only.

After 2020 it will be £500 rent less cost £100 no longer allowed to deduct interest payment of £200 but can deduct 20% so amount taxable is £360.

Times this by the amount of properties will mean big tax increases regardless

Reply to the comment left by “Neil Robb” at “15/07/2015 – 10:27“:

Hi

Yes, your comments place you in the first camp, no longer able to deduct finance costs from profits.

If anyone can provide their understanding of the second theory, you are taxed on interest regardless of profit I’m keen to hear.

My opinion is also that it’s the first statement but I’m happy to change my opinion if someone can provide something to read/discuss.

Jason

Reply to the comment left by “Jason E” at “15/07/2015 – 10:57“:

I too would like to see something official that evidences the second theory, preferably from a .gov website, because every official website I have read supports the first theory.
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Reply to the comment left by “Mark Alexander” at “15/07/2015 – 11:02“:

My accountant interprets it as second theory , so do a few on other forums which is an even worse scenario