Budget 2016 – Landlord reactions

Budget 2016 – Landlord reactions

14:00 PM, 16th March 2016, About 7 years ago 137

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The Chancellor George Osborne has just delivered his Government’s Budget.

Quick reference details for Landlords Below:

Stamp Duty surcharge of 3% on residential property to apply to all investors regardless of size.

Stamp Duty on commercial property transactions is to be reformed. Our understanding is that bandings will be applied similar to residential property, albeit with a zero rate up to £150k and then 2% of any amount over £150K and up to up to £250K and then 5% of any amount over £250k. As an example, on a property that costs £300,000 the SDLT would be £4,500 – i.e. £0 on the first £150k, 2% on the next £100k (£2,000) and finally 5% on the next £50k (£2,500). If our understanding is correct then this will also impact on on related transactions of 6 or more connected property transactions (e.g. at incorporation of a property portfolio). More on this HERE

Capital Gains Tax Reduced – from 28% to 20% for higher rate tax payers and from 18% to 10% for low rate tax payers from April 2016. However there will be an 8% surcharge on residential property leaving Landlords selling at the same old rate!

Maximum interest relief against profit capped at 30% of turnover, but this is only for the largest companies and will not affect Landlords. This was a concern for Landlords pre-Budget.

Tax free income tax allowance threshold – increased to £11,500 from April 2017

High rate tax threshold – increased to £45,000 from April 2017

Corporation tax – decreased to 17% by 2020

Insurance premium Tax IPT – increased 0.5% and funds raised to be spent on UK flood defences (£700million)

Fuel Duty – Frozen again this year

Class 2 National Insurance for self employed to be scrapped

The Office for Budget Responsibility has downgraded growth forecasts due to external economic headwinds from the uncertainty in the Global economy.

Growth for 2015 was 2.2% but the forecast has reduced from 2.4% to 2.0% in 2016 with 2017 growth of 2.2% and then 2.1% for the following years.


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Jon Pipllman

14:28 PM, 20th March 2016, About 7 years ago

"Almost certainly" ??

There is absolutely no doubt whatsoever. None

John Mcgowan

18:16 PM, 20th March 2016, About 7 years ago

Reply to the comment left by "NW Landlord" at "20/03/2016 - 11:09":

Hi NW landlord I sympathise with you all and agree with all you say. I hope the telegraph publish this excellent letter in order to educate other landlords ,tenants politicians and the judges who look at the Judicial review case. I and my wiife have 15 properties and like you treat our tenants well ie by not increasing rents unnecessarily and helping them out when they struggle etc. Osborne is a greedy incompetent power hungry right winger whom Ian duncan smith has assessed correctly but unlike the poor disabled we have very few friends and no easy way of getting the same publicity. We will not incorporate but will pay of some mortgages and sell some of our properties making many really decent families unnecessarily homeless. We also get calls from our local coucils asking for homes for the homeless now before this Osborne sunami even arrives. Let's hope someone in authority sees sense and terminates clause 24 before he'll itself is unleashed.

NW Landlord

20:15 PM, 20th March 2016, About 7 years ago

Hi john thanks

I believe the sheer volume of properties we own and manage in deprived areas will raise sum eybrows we are talking about hundreds of families in the same town all exactly what this Ill thought out policy targets. It's potentially a political hot potato with the right exposure this could get the right attention

John Mcgowan

21:03 PM, 20th March 2016, About 7 years ago

Reply to the comment left by "NW Landlord" at "20/03/2016 - 20:15":

Let's hope so for the sake of all of us landlords, tenants, letting agents, our employees and the economy!

Paul McCready

21:28 PM, 22nd March 2016, About 7 years ago

Hi Nicholas
I spoke with Mark Smith today about using a BICT which Im really quite open to do.
Quick question(s).
How long have you had your BICT set up and have your accounts gone through your accountant since setting it up.

Also looks like the lenders (who will lose millions in new B2L appilcations) are starting to look at ways to help out landlords looking to incorporate..


I think more BTL lenders will go this way.


Nicholas Dickinson

21:44 PM, 22nd March 2016, About 7 years ago

Reply to the comment left by "Paul McCready" at "22/03/2016 - 21:28":

Hi Paul. I am in the process of incorporating my portfolio at the moment and will complete before the end of the month in order to beat the 3% SDLT surcharge coming into play. I had seen the press release fron Kent Reliance and there is no doubt that more lenders are going to follow suit and encourage their borrowers to incorporate which will save the need for the BICT structure but you will still have the SDLT problem to deal with which is why I have decided to act now rather than wait

NW Landlord

21:50 PM, 22nd March 2016, About 7 years ago

There must be a way with the lenders working with u to refinance into a limited company without paying SDLT could just be a change of title this is all still very new there in my opinion will be all sorts of schemes coming out of the woodwork

What about paying off ur mortgages one by one and refinancing into a limited company name would that mean u paid SDLT on a remortgage ?

Nicholas Dickinson

22:00 PM, 22nd March 2016, About 7 years ago

Reply to the comment left by "NW Landlord" at "22/03/2016 - 21:50":

In a word - yes! SDLT has nothing to do with finance. If you transfer properties from your own name to a company that is deemed as a sale and purchase by HMRC and the company is liable for SDLT on the market value in exactly the same way you would be liable for SDLT if you acquired the property from a third party

NW Landlord

22:03 PM, 22nd March 2016, About 7 years ago

Let me put something out there what if u set up a limited company totally seperate and took out leese options on all ur properties so the limited company was liable for the tax on receiving rents and paying the mortgage ?

Paul McCready

22:53 PM, 22nd March 2016, About 7 years ago

Reply to the comment left by "Nicholas Dickinson" at "22/03/2016 - 21:44":

Nicholas are you having to pay mortgage arrangement fees for moving the properties into your new company seeing as the company has to purchase the properties?

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