Govt Sticks With Btl Tax Relief Withdrawal!

[Patient London FTB]

Woop woop!

"Any lingering hope that the buy to let sector might have of a rethink by the new Chancellor over restructuring mortgage interest tax relief for landlords has been quashed," Letting Agent Today is reporting.

Their story links to this HMRC announcement: https://www.gov.uk/government/news/changes-to-tax-relief-for-residential-landlords?

[Neverwhere]

Nice find!

[Venger]

Yes; good find Patient London FTB.

Renter savers on my side celebrate.

\o/ \o/ \o/ \o/ \o/ \o/ \o/ \o/ \o/ \o/ \o/ \o/

It passed through parliament, and became law (I've been looking for the image showing all those stages but can't find), yet of course in the realm of HPI+++ always had some concerns the powers that be might suspend it.

Good news they seem to be holding to it. As I understand it, couple of million pounds was invested in HMRC's systems to upgrade for the changes.

[StainlessSteelCat]

[Lavalas]

It passed through parliament, and became law (I've been looking for the image showing all those stages but can't find), yet of course in the realm of HPI+++ always had some concerns the powers that be might suspend it.

Here, if this is what you were looking for...

http://services.parliament.uk/bills/2015-16/finance.html

[Venger]

Here, if this is what you were looking for...

http://services.parliament.uk/bills/2015-16/finance.html

Thank you Lavalas.

That was exactly what I was trying to find.

The BTLers petition - makes me chuckle.

And half-way through petition, the petition committee told them it wouldn't have any meaning if they did reach even the 100,000 signatures the required for a hearing (not 1 million), because it was already being debated in House of Commons (they put an update on bottom of the page).

Because the issue is currently being looked at in Parliament, the Petitions Committee decided not to take any further action on this petition.

Don't think the BTLers noticed that as then kept on furiously plugging the petition, getting another 25K signatures, and seeing it time out (6 month limit) on 60,894 signatures.

We need to think beyond asking landlords to sign and also ask tenants, homeowners, accountants, lawyers, mortgage brokers, bankers, letting agents, estate agents and as many other trades as we can think of which are supported by the PRS to get involved too.

We ought to aim high, why not go for a million signatures. Somebody once told me “aim for the stars and you will be over the moon in no time at all”.

https://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-125/#comment-59835

[Si1]

Joy

[spyguy]

Now to remove basic rate relief.

[Bruce Banner]

I hate to rain on anyone's parade, but as I understand it, following their unsuccessful petition, they are engaged in legal action (represented by fellow landlord Cherie Blair) to have the law repealed.

Edit: Here is a recent post from their forum which agrees with my reading of the situation.

These postings are from HMRC not from HM Treasury or Gauke or Hammond.

I think this is just the normal slow grinding of the bureaucratic wheels implementing the S24 as enacted last November churning various bits of guidance etc.

I don’t think this anything more than that, and certainly not a statement of the new Governments position on S24. Having said that I doubt S24 is on the new Governments agenda, they’ve an enormous to-do list already exacerbated by Brexit, without opening up existing legislation.

Edited July 21, 2016 by Bruce Banner

[Si1]

I hate to rain on anyone's parade, but as I understand it, following their unsuccessful petition, they are engaged in legal action (represented by fellow landlord Cherie Blair) to have the law repealed.

True. But who honestly gives it much chance of success?

[Bruce Banner]

True. But who honestly gives it much chance of success?

Now that's another matter.

[Venger]

Thoughts of a couple of BTLers from one of the BTLer forums. To be honest I do keep some caution. Not absolutely going to allow myself to believe it will happen, but I allow myself to dream it will. Everything seems to have gone smoothly so far... from the shock of the announcement (for HPCers and for BTLer lol) in Budget 2015, and then passed through to become law.

These postings are from HMRC not from HM Treasury or Gauke or Hammond.

I think this is just the normal slow grinding of the bureaucratic wheels implementing the S24 as enacted last November churning various bits of guidance etc.

I don’t think this anything more than that, and certainly not a statement of the new Governments position on S24. Having said that I doubt S24 is on the new Governments agenda, they’ve an enormous to-do list already exacerbated by Brexit, without opening up existing legislation.

No to mention the enormous problem with homelessness come 2020 – unless of course we are successful with the Judicial Review.

The homelessness... like there will be no market for other buyers of the properties at lower prices, from BTLers having to sell off, in the pincer. Less relief and having to treat gross income, rather than net, raising their tax liability. And CGT trap for many who would look to sell up.

This is what Govt Sticks With Btl Tax Relief Withdrawal! / S.24 means....

Whilst the tax deductibility regulation only applies to higher rate taxpayers, having to put 'gross rent' as opposed to 'net income' in tax returns means a substantial number of lower rate taxpayers will become higher rate taxpayers.

Edit update: Bruce Banner got to it before me, hehe. Although I remain optimistic.

Edited July 21, 2016 by Venger

[silver surfer]

Good post PLFTB

[Bruce Banner]

Thoughts of a couple of BTLers from one of the BTLer forums. To be honest I do keep some caution. Not absolutely going to allow myself to believe it will happen, but I allow myself to dream it will. Everything seems to have gone smoothly so far... from the shock of the announcement (for HPCers and for BTLer lol) in Budget 2015, and then passed through to become law.

The homelessness... like there will be no market for other buyers of the properties at lower prices, from BTLers having to sell off, in the pincer. Less relief and having to treat gross income, rather than net, raising their tax liability. And CGT trap for many who would look to sell up.

This is what Govt Sticks With Btl Tax Relief Withdrawal! / S.24 means....

Edit update: Bruce Banner got to it before me, hehe. Although I remain optimistic.

It's laughable that they continue to believe in the "homelessness" argument.

[Blod]

On the point of their legal challenge to S24, how often have these succeeded. If there was a chance of overturning this it might not be till next year that anything comes to fruition or would they know their position this year. The reason Ii ask is uncertainty is the markets enemy. The longer it gets dragged out the more harm done. So anyone know how likely it is to be overturned and what sort of timescale are they looking at?

[Bruce Banner]

On the point of their legal challenge to S24, how often have these succeeded. If there was a chance of overturning this it might not be till next year that anything comes to fruition or would they know their position this year. The reason Ii ask is uncertainty is the markets enemy. The longer it gets dragged out the more harm done. So anyone know how likely it is to be overturned and what sort of timescale are they looking at?

Unlikely in my opinion, my main concern is a policy change by the new Chancellor.

[Si1]

Unlikely in my opinion, my main concern is a policy change by the new Chancellor.

I'd be surprised if that happened. Already Theresa May has said 'it's not austerity, it's living within our means'. I think we have a fiscally conservative government.

[SarahBell]

And hopefully HMRC will just be able to go through their list of returns and note the ones that have come from landlords in the past and double check they're doing them right.

[Blod]

And hopefully HMRC will just be able to go through their list of returns and note the ones that have come from landlords in the past and double check they're doing them right.

Let's hope that Theresa May's 'living within our means' means exactly that. My hope is that their challenge drags on for years. For them the uncertainty will be agony, good.

[mmt]

The basis of the legal challenge, I believe, is EU state aid law (which is described here).

One of the key points is this:

• the intervention is likely to affect trade between Member States.

With the prospect of the UK no longer being a member state, I find it hard to believe they could (after Brexit) use EU law to overturn a law passed by Parliament. That would not look good at all.

If it is a judicial review, then I assume a judge would want to take this into account?

[Lavalas]

The judge is certainly doing a good job of playing for time (or pondering what the government's defence might be). It's months since they were due to hear whether their application was successful. Although Bolton and his wingman do seem to have a habit of keeping their supporters in the dark I believ an update is due very soon.

[knock out johnny]

The basis of the legal challenge, I believe, is EU state aid law (which is described here).

One of the key points is this:

• the intervention is likely to affect trade between Member States.

With the prospect of the UK no longer being a member state, I find it hard to believe they could (after Brexit) use EU law to overturn a law passed by Parliament. That would not look good at all.

If it is a judicial review, then I assume a judge would want to take this into account?

Judges apply the law as it stands at The time the case is being judged, not on what may or may not be the law in the future.

If proceedings drag on past activation of article 50, the judge will have to decide what effect that has on eu law's influence on the UK (still applicable for 2 years from the trigger date of article 50 unless the parties concerned agree to exit the eu early)

[Pop321]

It's laughable that they continue to believe in the "homelessness" argument.

So glad you and V spotted and picked up on this. I saw it but HPC site was down yesterday.

I think I might be able to explain the homelessness as I am well studied in the 118 ways.

As I understand it S24 kicks in and due to my feckless house of hards finance and £2m debt it means my flimsy and poorly thought out strategy now fails. No fault of my own of course.

Then the bank repossess all my houses and evicted the tenants. The houses are then boarded up for 50 years and the tenants are homeless. The world becomes a worse place, famine and plagues set across the UK and everyone dies.

This can be avoided by raising rents....but that is another illogical argument and infact would actually contradict this first argument so best not merge the two.

Think that covers the main points.....oh, and it's all very unfair for LLs too.

[Bruce Banner]

So glad you and V spotted and picked up on this. I saw it but HPC site was down yesterday.

I think I might be able to explain the homelessness as I am well studied in the 118 ways.

As I understand it S24 kicks in and due to my feckless house of hards finance and £2m debt it means my flimsy and poorly thought out strategy now fails. No fault of my own of course.

Then the bank repossess all my houses and evicted the tenants. The houses are then boarded up for 50 years and the tenants are homeless. The world becomes a worse place, famine and plagues set across the UK and everyone dies.

This can be avoided by raising rents....but that is another illogical argument and infact would actually contradict this first argument so best not merge the two.

Think that covers the main points.....oh, and it's all very unfair for LLs too.

In a word....... solipsism.

[Lambie]

These postings are from HMRC not from HM Treasury or Gauke or Hammond.

I think this is just the normal slow grinding of the bureaucratic wheels implementing the S24 as enacted last November churning various bits of guidance etc.

I don’t think this anything more than that, and certainly not a statement of the new Governments position on S24. Having said that I doubt S24 is on the new Governments agenda, they’ve an enormous to-do list already exacerbated by Brexit, without opening up existing legislation.

In a previous life I had some involvement in the publication of guidance on gov.uk.

When there are ministerial changes, any contentious guidance would be withheld until it was cleared by the new Minister.

This would certainly qualify as contentious, so almost certainly this has been rubber stamped by the new ministerial team.

This is now officially government policy. You may uncork the champagne.