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Bruce Banner

Tax Relief On Buy To Let Mortgage Interest.

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I'll be very surprised if this happens given the tax principles at stake (as described in the letter). Unless it is constructed in some sneaky way just as a measure to crack down on tax evasion I.e. force people to incorporate/ register in some fashion to claim the tax relief on interest. That might actually be a smart play and very much in keeping with the 'tax evasion/avoidance' agenda.

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I wonder if anyone at HMRC has compared the figures in the letter to see how much tax this 'business' generates for the treasury? How many tax returns contain BTL entries etc outlining their profits as well as their costs ... I suspect that BTL as a business is a disaster for HMRC with billions in mortgage interest tax relief and virtually no taxable income ie revenue for HMRC.

I would imagine mortgage interest deductions are very much less than the figure above. I overheard a colleague some time ago complaining that HMRC had rumbled him and were demanding tax but he was arguing that after interest and expense he hasn't earnt anything. Not sure how he got on. Most people assume you don't need to declare it if you're not making very much. I would say that this is an avoidance sweep and that revenue's will have to pass through some sort of company structure.

Typically in the letter they didn't mention the other options to raising rents being, taking it on the chin, decreasing leverage and ahem, selling.

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NLA_Letter_030715.gif

http://www.landlords.org.uk/news-campaigns/news/nla-write-the-chancellor-ahead-budget

1. Support for the housing industry

What does that even mean...housing is required whether is it bought by owner occupiers or landlords. Putting landlords in no better position would simply encourage more owner occupiers. Its a zero sum game.

2. Provision of Flexible Accomodation

Landlords provide nothing. They simply 'manage'. Builders provide accomodation. Houses don't destroy themselves when a landlord dies. The housing stock is whatever the housing stock is, regardless of how many landlords exist. If they cant make the sums stack up, house prices fall to a lower equilibrium to entice new entrants into the market. Rents fall. Apparently this is bad.

3. Direct (tax) contributions.

Again, do they think the money is simply burned?! It doesnt just disappear. Their tax relief is someone elses cost.

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Please please please be true

I doubt it will be. The tories know they need homeowners to vote for them, and homeownership is falling. But being tories they'll construct some godawful keynesian mess to entice more people into homeownership by getting the taxpayer and saver on the hook for the next half century.

Think 'gifted' 50% deposits.

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Wah wah waaaaaahhh

This is the start of it. People have been saying here for years it was just a matter of time before the Govt started to look at using tax income from BTL.

It is now starting. Good.

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Wah wah waaaaaahhh

This is the start of it. People have been saying here for years it was just a matter of time before the Govt started to look at using tax income from BTL.

It is now starting. Good.

recent landlords are in for a shock with low yields and higher taxes :lol: lovely

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Just announced in Budget:

"Mortgage interest payments can be offset against income for buy-to-let landlords, an unfair advantage over people buying homes to live in, he says. This has fuelled buy-to-let mortgages, which are now 15% of the market. Mortgage interest relief will be restricted to the basic rate of interest, he says. Room rental tax relief will be raised to £7,500"

Any accountants out there who can explain exactly what this means?

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