Commercial Trust

Registered with Property118.com
Tuesday 28th July 2015


Latest Comments

Total Number of Property118 Comments: 9

Commercial Trust

11:40 AM, 2nd September 2016, About 5 years ago

Capital gains on BTL to be taxed as income

We've published a more in-depth analysis on our website, which you can read here: https://www.commercialtrust.co.uk/news/property-investment/new-tax-on-btl-property-sales/

We discuss the background to the legislation, from its inception in Budget 2016 to the report stage of the Finance Bill; the haste of its introduction; the intention behind the legislation and the issues with the wording; existing guidance on REITs that provide some insight into HMRC's processes; and the current guidance on equivocacy and 'intention at acquisition'.... Read More

Commercial Trust

16:22 PM, 1st September 2016, About 5 years ago

Capital gains on BTL to be taxed as income

Reply to the comment left by "Whiteskifreak Surrey" at "31/08/2016 - 16:40":

"How it is possible the law or regulations apply retrospectively? Am I missing something?"

There are precedents in taxation for ex post facto law: http://news.bbc.co.uk/1/hi/business/8496921.stm

Given that the intent of the legislation is to prevent offshore tax avoidance, it isn't completely surprising that it would take effect before the date of assent.... Read More

Commercial Trust

16:25 PM, 31st August 2016, About 5 years ago

Capital gains on BTL to be taxed as income

Thank you for the Accounting Web links that validate everyone's concerns. The point is that, intention of the new clauses notwithstanding, there is no clear distinction in law between investors and traders. So buy-to-let landlords could still be caught by conditions A and B when they sell, due to the "main intention" test the new legislation imposes.

Also, I'm not sure that this has been covered, but the legislation takes effect from the date of its transposition into the Finance Bill: so transactions that took place on or after 5 July are affected.... Read More

Commercial Trust

11:11 AM, 18th May 2016, About 5 years ago

Rental cover to be lower for Ltd company BTL applications than individual!

Discrimination? Perhaps. But is it unlawful?

In short, no. One's status as a private or corporate individual is not a 'protected characteristic' under the Equality Act 2010. If a service provider enforced rules that adversely affected people because of their religion or sex, then it would be a different matter.

Even age, which is a protected characteristic, is a valid criteria for lending restrictions. Since 2012, an exemption from EA 2010 has allowed lenders to exclude some borrowers on the basis of age if it is objective and relevant to do so.

FOS insight briefing – age, complaints and the ombudsman

Lenders will make commercial decisions based on market conditions. Applying higher DSCRs for private landlords is no different to, and no less lawful than, doing the same for HMO borrowers (something lenders have been doing for some time) or charging higher interest rates to first-time landlords.

As an initial response to the new tax rules, and at a time when the economic future of the UK is uncertain, this sort of criteria change is to be expected. Once the market adjusts, we might see more case-by-case risk assessment and individual underwriting.

In the meantime, it will be interesting to see how the judicial review of FA 2015 s. 24 pans out.... Read More

Commercial Trust

11:07 AM, 18th May 2016, About 5 years ago

Rental cover to be lower for Ltd company BTL applications than individual!

Discrimination? Perhaps. But is it unlawful?

In short, no. One's status as a private or corporate individual is not a 'protected characteristic' under the Equality Act 2010. If a service provider enforced rules that adversely affected people because of their religion or sex, then it would be a different matter.

Even age, which [i]is[/i] a protected characteristic, is a valid criteria for lending restrictions. Since 2012, an exemption from EA 2010 has allowed lenders to exclude some borrowers on the basis of age if it is objective and relevant to do so.

[url=http://www.financial-ombudsman.org.uk/publications/policy-statements/age-insight-briefing-2015.pdf]FOS – Just a number? Age, complaints and the ombudsman[/url]

Lenders will make commercial decisions based on market conditions. Applying higher DSCRs for private landlords is no different to, and no less lawful than, doing the same for HMO borrowers (something lenders have been doing for some time) or charging higher interest rates to first-time landlords.

As an initial response to the new tax rules, and at a time when the economic future of the UK is uncertain, this sort of criteria change is to be expected. Once the market adjusts, we might see more case-by-case risk assessment and individual underwriting.

In the meantime, it will be interesting to see how the judicial review of FA 2015 s. 24 pans out.... Read More