Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Appalled Landlord” at “20/07/2015 – 20:12“:

Many landlords have recently refinanced onto the 4.99% fixed rate for 10 years with TMW in order to secure their cashflow.

Whether this example is made up or not, it does show very clearly why the proposed taxation policy is flawed.
.

Reply to the comment left by “Appalled Landlord” at “20/07/2015 – 20:31“:

Done 😉
.

Yes, and the Government-owned MX has been trying to persuade us all for years to remortgage onto more expensive deals – so the Government has been responsible for pushing landlords towards more expensive products and will now sting them for it! If I was on 5% now I’d have a lot less leeway to be able to handle this thing.

Reply to the comment left by “Appalled Landlord” at “20/07/2015 – 21:34“:

Thks for the correction Appalled – I took the 17200 as the “tax due on whole 20% ” from the eg supplied …guess they must have used a diff fig for where 40% band begins!

It would be good to run those figs (Ros) thru as a single LL as opposed to 2 people as LL , to demonstrate the difference, and stop people looking at the eg as typical for a single owner which will mislead people with similar figs for their portfolio ….i dont want to get figs wrong , so l will leave it in your hands !

Here is a similar portfolio (REAL)

16-17 20-21
Rental income 340k 340k
Exps 60k 60k
Int 80k 0
Net Rental Profit 100k 280k
Personal allowance 0k 0

Taxable income 78k …..280k
basic rate…….8400 …..8400
40% …………….43200 …..8400
45% ……………22500…..58500
…………………….74100…110100
Less 20% relief (16k)
net tax liability 74100 …. 94100

Tax increase 0…………… 20000
effective rate on “real” profit 37% ….47%

All of the examples we have looked at IGNORE the other change, ie removal of 10% wear & tear which has has incresed the tax liabilty on the above from £58,800

the real impact on this porfolio is actually an extra £35,300 not an extra 20K as above with that worked in , so tax effect up from 29.4% to 47% (ie 10% of 340k @ 45%(15,300) which is no longer to be claimed) …really appreciate it if you spot any mistakes in this one Appalled , thks .

Reply to the comment left by “Simon Roads” at “20/07/2015 – 22:10“:

taxable income should be 200k …edit still not working ! Mark ..sort it out mate !

Reply to the comment left by “Simon Roads” at “20/07/2015 – 22:12“:

I have sent an URGENT reminder to our web-developers.
.

Here is a similar portfolio (REAL) – correct figs ..until Appalled checks them !!

16-17 20-21
Rental income 340k 340k
Exps 60k 60k
Int 80k 0
Net Rental Profit 200k 280k
Personal allowance 0k 0

Taxable income 200k …..280k
basic rate…….8400 …..8400
40% …………….43200 …..8400
45% ……………22500…..58500
…………………….74100…110100
Less 20% relief (16k)
net tax liability 74100 …. 94100

Tax increase 0…………… 20000
effective rate on “real” profit 37% ….47%

All of the examples we have looked at IGNORE the other change, ie removal of 10% wear & tear which has has incresed the tax liabilty on the above from £58,800

the real impact on this porfolio is actually an extra £35,300 not an extra 20K as above with that worked in , so tax effect up from 29.4% to 47% (ie 10% of 340k @ 45%(15,300) which is no longer to be claimed) …really appreciate it if you spot any mistakes in this one Appalled , thks

Reply to the comment left by “Simon Roads” at “20/07/2015 – 22:10“:

Hi Simon

I can’t calculate tax on incomes above £121,200 on the back of an envelope, so I will leave that to Simon Lever or Jason to use their software.

Reply to the comment left by “Ros .” at “20/07/2015 – 22:03“:

FTB …you mean the ones that buy all the flats then hang on to them and let them out as they move up the ladder ?
The ones who pay no CGT who get preferential mortgage rates ?
I have mainly 4, 5,6 & 8 bed HMOs and have never been up against a FTB when buying that i am aware of ?
..nor when i buy buildings split into flats ?
we have removed a large % of housing market above, so the discussion only leaves 1, 2 & poss 3 bed props to discuss ?

Reply to the comment left by “Mark Alexander” at “20/07/2015 – 22:07“:

Hi Mark

I’ve received an email re the open WB forum and the secure one. I left a comment on the open one warning them to ignore anything written by Gary Mason.