Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Jim S” at “23/04/2016 – 10:16“:

Jim,

At the moment you deduct 100% of your finance costs from your rental income (together with other expenses) to arrive at your gross profit.

My understanding is that in FY2017/18 you calculate your profit using only 75% of your finance cost as a deduction against profits. Then after calculating the tax due (which could push Basic Rate Taxpayer into the Higher Rate bracket) you reduce you tax liability by 20% (Basic Rate Tax) of the 25% of the finance costs not allowed.

In the next FY the figures will be 50%/50% split and the year after 25%/75% before becoming 0%/100% respectively.

Reply to the comment left by “Barry Fitzpatrick” at “23/04/2016 – 10:51“:

Barry, your explanation is spot on.

Barry/Simon,
Thank you very much for that.

http://www.cityam.com/239451/yougov-poll-twice-as-many-people-support-buy-to-let-tax-hike-than-oppose-it

“YouGov Poll: Twice as many people support buy-to-let tax hike than oppose it”

Of Course more people will support it as there are only 2 Million landlords against 58 million others who are not! What a ridiculously fallacious survey.

Reply to the comment left by “Simon Hall” at “24/04/2016 – 16:34“:

It is.

I first thought it would be about the S24 issue, but was slightly surprised to see its almost exclusively about SDLT. And when you analyse the figures a large number remain unsure or don’t know, so presenting this as the population at large being overwhelmingly in favour is definitely misleading. Not to mention, as you say, that such a tiny percentage of the population are landlords that clearly this indicates that many non-landlords (homeowners?) think this is a bad idea.

Yet another example which conforms to my favourite quote by Aaron Levenstein

“Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”

Reply to the comment left by “Simon Hall” at “24/04/2016 – 16:34“:

The question should have been,

To tax landlords more,the Government has had to introduce Specific Discriminatory Powers against them.

Do you believe discrimination is the right thing to do?

Reply to the comment left by “James Fraser” at “24/04/2016 – 17:26“:

Followed by an accurate description of what C/S 24 actually is and who it targets, a useful YouGov survey could ask the following NON LOADED question:

– Given the above factual explanation of what is actually being proposed by the government, do you agree with the government that residential landlords who do NOT own ‘their’ rental properties in their own name and/or do NOT have mortgages on those properties in their own personal name(s) deserve favourable treatment from the government?

C/S 24 is and always was clearly nonsensical. What they should have considered instead is:

1. Applying a levy to all property (residential or commercial) that is not the owner’s primary residence or their place of work.
2. IF after consultation evidence clearly shows that interest only BTL mortgages are a genuine threat to stability of the economy, then simply remove or phase out the interest only element of BTL mortgages.

Reply to the comment left by “Mark Shine” at “25/04/2016 – 20:43“:

If I have two identical flats, one with a mortgage, one without a mortgage, the same rent on both flats, I pay more tax on the rental income from the mortgage free flat than I do on the one with a mortgage. How is that receiving more favourable treatment from the government on the flat with no mortgage?

I don’t agree with clause 24 but I don’t think trying to get tax increases on individual landlords without mortgages is helpful.

Reply to the comment left by “S.E. Landlord” at “26/04/2016 – 09:12“:

You are correct and it highlights the lie behind Clause 24. You are rightly taxed on the rent derived from your asset (the unencumbered flat). At present you are also taxed on that rent derived from, more or less, that part of the mortgaged flat that you own. Under C24 you will be taxed on gross income from an asset that you do not own and the owner (i.e. the lender) gets taxed again on the interest received i.e. double taxation.