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About thom123

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  1. Yeah, that's how I understand it too. There's an actual, cashflow loss but, in terms of HMRC, there's a paper profit i.e. 20k income, 12.5k interest (actual is £25k but HMRC only recognises half of it), so £7.5k profit @ 40% = 3k. Same result as you though you probably expressed it better. Another aspect of this is that in the above scenario, the actual loss and the tax bill would presumably have to be paid for from the landlord's post-tax employee (or other source of) income. It couldn't be offest against their employee tax bill.
  2. Of course, there will be various ways to mitigate the effect, the most obvious of which will be to move the properties into a Ltd Co, which, as it means selling the property from the individual to the company, will incur CGT at the point of sale - so a nice little tax take for the government, if the property has risen in value.
  3. Yes. though, to be fair, is his costs are 90% of his turnover, at a time when the base rate is 0.5%, he was going to be f***cked sooner or later. Those hardest hit will be the ones (assuming higher rate tax) who have high leverage and low yields - which is ironic because they'll be the ones with the lowest 'real' profit.
  4. I think he's just wrong. I think that at 100k income, 80k interest and 10k other costs his real and paper profits are 10k hence £2k tax bill for basic rate, £4k for higher rate (so £6k left as post-tax profit). On the new system, as a basic rate tax payer everything remains the same. As a higher rate tax payer, his paper profit becomes £50k hence a tax bill of £20k rather than 4k (so £-10k as post-tax profit). I doubt his example is that realistic, mind. OK, just fully read your post and see you also think £20k tax.
  5. That sounds correct to me (though let's face it, anything to do with tax is horribly complex). Effectively, I think the impact is that the 'paper' profit is increased by 20% of the mortgage interest cost. But from a cashflow perspective, the full mortgage interest still has to be paid, so it could result in a situation in which the landlord makes a 'real' loss (i.e. they spend more than comes in) but still shows a 'paper' profit and therefore has a tax bill. On the wear and tear allowance, that only applies to furnished lettings and I think works in a similar way to the flat rate VAT scheme f
  6. Spreadbetting market has opened with a 2% drop in the FTSE: http://www.ig.com/uk/ig-indices/ftse-100
  7. I can imagine the rates offered by the providers being (relatively) generous as it'll be a marketing tool for attracting people to hawk a mortgage to.
  8. Hi Bootstrap, where in Watford are you? I'm working down there at the mo. £1000 does seem steep. You can get 1 beds for around 650 and 2 beds for 800. Seems to be a new build development springing up in Watford every few weeks.
  9. I didn't mention hassle or intertia, but tax-leakage, transaction costs or any other financial aspect involved has to be considered when comparing the returns of selling or holding and may, therefore, represent a good reason to hold. Wouldn't you bear in mind taxation when comparing a cash ISA and a taxed savings account? Inherently, the most diversified investors must be (to some extent) invested in property!
  10. There are other, less pejorative, reasons for holding a low-yielding property: 1. It may be high-yielding when taking the purchase price rather than the current value. If the LL is not intending to retire anytime soon, the effect of CGT and transaction costs might outweight the benefits of selling up when prices are high (and therefore yields are low) and buying again when prices are low. Better to simply ride the waves and stay in the market. 2. It might be a retirement property or dream home that the intend to move into in 15 or 20 years time. The odd fluctuation isn't that important to
  11. I think that's harsh, bambam. Over-spending is a recognised symptom of bipolar disorder - I don't think her behaviour is as reckless as your 'cash on enjoying herself' comment suggests. Of course, she could be faking it, but as she has attempted suicide several times and self-harms, she's doing a good job of pretending. If the bank are lending irresponsibly (according to the post, they knew of her condition) then I believe they're in breach of the regulations. I've worked in a building society and a bank and know that they target those on low incomes, the financial illiterate and now, seem
  12. Ah Gudjon!! His other son was Thordur. Gudjon was responsible for one of the happiest moments of my life (beating Cardiff in the play-off semi-final). I might have to buy the plave for the honour of peeing in the same toilet as him!
  13. Which ex-Stoke manager, Amoeba? D'you have a link so I can be nosey?
  14. I'm in Fenpark, near Longton. It's nice enough where I am but I'd prefer somewhere a little greener, so I've been looking at Barlaston, Stone, Stafford. Also, I work down South and Stafford has a good train service to London. Stafford prices do seem very high though - were they always that high in relation to Stoke or has the toll road and fast train service to London caused a bit of extra speculation, I wonder? Any idea what the average wage is in Stafford? In Stoke, it's 17k which makes the average price of 95k seem high. That said, I read in The Sentinel that more people are moving from Sto
  15. Stoke here. I wonder if we're seeing the 1st signs of prices stalling in Stoke. I see a few places sitcking and being reduced, plus some new places coming on to the market at slightly lower prices than I'd expect. Still, way more expensive than a couple of years ago though, and too much for me to justify moving up to something bigger and better. One set of properties I follow closely are the new(ish) builds on Trentham Lakes. There's a ruck of them for sale now (I think a lot were bought up by investors who found that they don't rent for much). What amazes me is that most are now on at 165k,
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