Property118 Founder Sends Open Letter To Chancellor Philip Hammond

by Mark Alexander

A week ago

Property118 Founder Sends Open Letter To Chancellor Philip Hammond

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Property118 Founder Sends Open Letter To Chancellor Philip Hammond

Dear Mr Hammond

On behalf of the UK Private Rented Sector represented by the Property118 online community our requests are both simple and straight forward to implement and have no cost implications to HM Treasury.

Please help all UK private housing providers (AKA buy-to-let landlords), who wish to do so, to professionalise and corporatise their businesses.

Relief already exists under section 162 TCGA 1992 to allow businesses to roll their capital gains into company shares at the point of incorporation. This relief was confirmed as being available to some, but not all, private housing providers in the Tax Tribunal case of Ramsay v HMRC. However, ambiguity in regards to what constitutes a business remains. Please see the final paragraph in https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65715 to quote …

“You should accept that incorporation relief will be available where an individual spends 20 hours or more a week personally undertaking the sort of activities that are indicative of a business.  Other cases should be considered carefully.”

Our first simple request is that you acknowledge that all private housing providers are a business, and hence entitled to claim this rollover relief.

Further, SDLT relief exists when property rental partnership businesses transfer assets into a company as part of an incorporation process. We feel this should be extended to sole owners of rental properties.

These proposals will facilitate immediate property trading opportunities for landlords.

Many landlords initially built their property portfolios by purchasing properties which are better suited to owner occupiers. The majority of these properties now produce low rental yields but landlords are trapped into ownership through capital gains. Our proposals provide a release from this trap at no cost to HM Treasury.

No CGT revenue will be lost, because capital gains are merely being rolled over.

Additional Stamp Duty revenue will be raised as a result of freeing up the market and additional trading.

The opportunities afforded by incorpration will encourage many landlords to trade properties better suited to owner occupiers for investment into the creation of many more HMO’s.

Properties which are sold by incorporated landlords are more likely to be purchased by owner occupiers. This is because such properties are unlikely to appeal to landlords as investments due to the comparitively low rental yields.

Houses in Multiple Occupation provide much needed additional housing for job mobility, students and those who cannot afford or are not ready to consider home ownership.

You will doubtless be aware that recent tax attacks on landlords have resulted in many former Conservative supporters turning their backs on the party. We feel the above proposals could bring many of them back onside.

Yours sincerely

Mark Alexander – founder of Property118 “The Landlords Union”

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Comments

I do appreciate your letter Mark, but... Why didn't you mention the S24, which will kill the smaller Landlords, for whom incorporation is not practicable and far too expensive? (that was even mentioned in Olympia last week). Or from now on you only those who decided to go through incorporation will matter?
By not mentioning this Hammond may think you are actually in agreement to this horrible legislation.

Mark Alexander

A week ago

Reply to the comment left by Whiteskifreak Surrey at 14/11/2017 - 14:39
Hammond knows full well how opposed I am to s24. What I want to do here is give him a way out without the Conservatives being left with egg in their faces.

S24 doesn’t apply to landlords who incorporate.

My proposals make incorporation possible for all landlords who are serious about running their rental properties as a business, regardless of size or time commitment.

I didn’t mention s24 directly because I know what the response would be if I had done so. I have a collection of every response template Mr Gauke has ever drafted!

Well in Mark !!

Mark do you have an email address I can contact you on please.

Should it be corporatise?

Mark Alexander

A week ago

It should, thank you. I have amended the typo in the main article.

"Please help all UK private housing providers (AKA buy-to-let landlords), who wish to do so, to professionalise and corporatise their businesses."
This seems to imply that unincorporated Landlords are not professional!! Which is A). not true, and B). give ammunition to the anti-private Landlord brigade.

Mark Alexander

A week ago

Reply to the comment left by Barry Fitzpatrick at 15/11/2017 - 10:04
Hi Barry

That is not what is implied, but I do accept that some people will twist words to mean something else.

David Price

A week ago

Mark I like the photo, particularly the bow tie!

Hemant Shah

A week ago

Well done Mark
I hope Phillip Hammond act more appropriately and probably better than George Osborne

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