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Btl Scum Regrouping And On The Offensive. -- Merged

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Foundations Edge, with a visionary Hari Shelled-out central to the narrative.

Reminds me of another BTL updated Asimov classic..

Foundation and Empire Flirtation with Shed Hire

Perhaps it will be more akin to the prequel, Prelude to Taxation ;)

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Perhaps it will be more akin to the prequel, Prelude to Bankruptcy ;)

FTFY

Personally I think Down and Out in Malta and London is probably based on this quote from the crowdfunder page

However, we couldn't afford to sell any of our properties to raise the necessary funds because the capital gains tax would have exceeded the net sale proceeds.
Edited by eek

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If it is true that Busta's property empire has less equity than the CGT that would be due if he sold it all then clearly he's been MEWing to fund his lifestyle as well as new properties. How likely do we think it is that he's been correctly declaring this and hasn't been claiming tax relief on the interest paid for those loans?

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If it is true that Busta's property empire has less equity than the CGT that would be due if he sold it all then clearly he's been MEWing to fund his lifestyle as well as new properties. How likely do we think it is that he's been correctly declaring this and hasn't been claiming tax relief on the interest paid for those loans?

A Goon with a Mew

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If it is true that Busta's property empire has less equity than the CGT that would be due if he sold it all then clearly he's been MEWing to fund his lifestyle as well as new properties. How likely do we think it is that he's been correctly declaring this and hasn't been claiming tax relief on the interest paid for those loans?

I think it's possible but Unlikely, stamp duty, solicitors fees and mortgage admin fees add up

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Foundations Edge, with a visionary Hari Shelled-out central to the narrative.

Remember it's a trilogy:

Foundation

Foundation and BTL Empire

Second-mortgaged Foundation

Given the popularity as a science fiction theme of stories set on the (potentially habitable) moons of Jupiter and Saturn, I was certain that there must be a book with the title "Trapped on Io", or similar. But searching on Amazon shows that no such title has ever been used. The nearest I could get was this, although it does not count because it's only a screenplay published on Kindle with just a few pages:

https://www.amazon.co.uk/Dark-Side-Io-Ty-Johnston-ebook/dp/B002EVPXGY/ref=sr_1_1?ie=UTF8&qid=1472555730&sr=8-1&keywords=dark+side+of+io

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I think it's possible but Unlikely, stamp duty, solicitors fees and mortgage admin fees add up

I thought you could deduct buying costs from the 'profit' when calculating capital gains?

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I thought you could deduct buying costs from the 'profit' when calculating capital gains?

You can but the government don't make it clear what you can and can't claim.

Stamp Duty is an explicit ambiguity in that its not mentioned in the very short list of things that can be deducted...

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If it is true that Busta's property empire has less equity than the CGT that would be due if he sold it all then clearly he's been MEWing to fund his lifestyle as well as new properties. How likely do we think it is that he's been correctly declaring this and hasn't been claiming tax relief on the interest paid for those loans?

I think this is up to date but DYOR.

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I think this is up to date but DYOR.

I was thinking more:

Mr A buys a house for £100k with a mortgage of £80k, after a year the house is worth £200k so Mr A re-mortgages for £160k. Mr A puts £40k of this towards a second house and the interest is still tax deductible since the money has remained in the BTL business. Mr A spends the other £40k on a Range Rover and only half of the interest is tax deductible since it is £20k more than the value of the capital account when the business was started. Mr A claims the interest on the entire £40k as tax deductible on his tax returns and HMRC does not notice the error until Mr A draws attention to himself, triggering a full audit.

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I suspect that a lot of people may be caught out by BIM45700 though probably not Busta as it is really very, very basic stuff. I think that its more likely that it's catching out one house 'amateur landlords' who are doing their own accounts on self-assessment.

If you buy a BTL with a £15k deposit and an £85k mortgage (which was a typical LTV in 2001-2007) then as far as HMRC are concerned you've invested £100k of capital (£15k of which was yours) and can withdraw the money you put in, replacing it with debt, and the interest on the new debt is deductible.

Hence if the house price remained the same but lenders went bonkers and started offering 95% LTV mortgages, you could MEW out £10k. You'd now have a £95k mortgage. As this is less than the capital invested when the property was first let, all the interest is deductible

If you get some HPI and the house price goes up to £117,647.10 then (conveniently for my example) you can remortgage at 85% LTV again, and the bank will give you £100,000. You repay the £85k owed on the old mortgage and you've MEWed out £15,000. Now the amount of debt being serviced is equal to the amount of capital, but all the interest is deductible, regardless of what you do with the £15,000 (I'd go with gold plated alloys for the Evoque, natch).

Now suppose that you'd been really lucky with the HPI and instead of a gain of 17.6471%, house prices have doubled.

Once again you started off with £100k paid for the property with £15k cold cash and an £85k mortgage.

The property is now worth £200k. You can remortgage at 85% LTV. The bank give you £170k, you pay back the £85k on the old mortgage and you've got £85k. You spend the lot on a Range Rover Evoque and a Caribbean wedding (you marry your new Evoque, it's the only one who really understands you).

You are now paying interest on £170k worth of debt. However, the amount of interest that can be deducted when calculating your income tax bill is limited to the interest on the £100k which was the capital introduced when the property was first let. If you're paying 4% then your annual interest bill is £6,800. £4k can be deducted (the 4% on the original £100k) but the other £2,800 can't be.

Of course, come April 2017 you can only deduct 25% of the £4k and still none of the £2,800, hence you're actually showing a pretty decent taxable income compared to what you've been declaring if you've screwed up on the capital account rules. Taxy, taxy.

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I was thinking more:

Mr A buys a house for £100k with a mortgage of £80k, after a year the house is worth £200k so Mr A re-mortgages for £160k. Mr A puts £40k of this towards a second house and the interest is still tax deductible since the money has remained in the BTL business. Mr A spends the other £40k on a Range Rover and only half of the interest is tax deductible since it is £20k more than the value of the capital account when the business was started. Mr A claims the interest on the entire £40k as tax deductible on his tax returns and HMRC does not notice the error until Mr A draws attention to himself, triggering a full audit.

By my reckoning, relating to the items you mention, he has £140k in the capital account and is paying interest on debt of £160k , so yes, you're right there's £20k of debt where the interest is not deductible when it comes time to work out his income tax.

I think it helps to put slap on some details of the leverage on the second investment property. Let's say it's got a £60k mortgage.

Hence there is £200k in the capital account all told. He has total mortgage debt of £220k, hence his capital account is overdrawn by £20k and he cannot deduct the interest on that £20k.

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Looks like Bosher is back from her summer holiday. Another open letter. The Shelter Chief Exec being the lucky recipient this time.

I naturally have to assume that the only explanation for your reticence on the connection between Section 24 and rising rents is indicated in the language that you use when you refer to the PRS. You can’t do it without getting a dig in against us, can you? This is why you inserted the word ‘expensive’ before ‘private rents,’ in the quote above. Your point would be made without this adjective. It seems you cannot express the term ‘private rents’ without making it pejorative (just like we are used to seeing the word ‘greedy’ before ‘landlords,’ and talk of us ‘raking in taxpayers’ money’ – we won’t be doing that when we stop housing people on benefits).

To conclude, as I have said to you before, you are doing a grave disservice to those in society whom you are funded to protect. Pretty soon, the public and media will start to notice this. If I were you, I would change my stance on Section 24 immediately and start campaigning against it; but then I am able to admit when I have been wrong – are you?

Source

The author's tone is growing a little more strident, but I'm not sure that the letter is particularly persuasive. I think it might be a more constructive use of the author's time to sell a few houses and get that gearing down.

Time for a trip down memory lane, to get a feel for the intellectual powerhouse pumping out these letters.

Dr Rosalind Beck . says:

08/07/2015 at 15:37
I’m suffering from my thick gene this afternoon, so wonder if someone can help me out.
If I pay £5,000 per month in interest at the moment – so £60,000 per year (mostly at a rate of about 2.75%), and if my income is £20,000 per month, and I have a gross annual income of £240,000 – usually, I would put down the £60,000 interest payments as one of my costs, and say, £60,000 on other costs – maintenance, insurance etc., so I would be left with an annual profit of £80,000 (halved, as the business is shared with a partner), which would then be taxed at the basic rate – then would I no longer be able to put the £60,000 in as a cost? – does this new rule about basic tax relief mean that it would now be assumed that £48,000 of this (80%) is part of my profit, even though it isn’t? Sorry if I’m getting this all wrong – there’s some maths I just can’t do (I can never work out what the clocks going forward and backwards mean either!)

Dr Rosalind Beck . says:

08/07/2015 at 19:55
I’ve got a feeling even the Government doesn’t know what it has proposed… It’s still not making sense to me. As others have said, we can all offset 100% of the interest against our gross income. My worry is that somehow it is going to mean we can’t offset the interest payments at all. Because people have been going on over the last few weeks or months about ‘a level playing field’ between residential and BTL mortgage holders – despite the fact that BTL is a business and we landlords also can’t offset our residential interest payments on our actual homes. According to that logic, we also wouldn’t be able to offset the money we spend on insurance, maintenance, everything really. We would be taxed on the gross rental income. According to this, our business wouldn’t be a business; it would just be a personal hobby, where we spend money on other people’s homes as an act of altruism.
Does anyone here have a contact in Government that they can ask to explain this? It seems like it could be a ****-up. Hopefully it will get cleared up in the next few days.
I have come across the idea before that you are taxed even on no income. Eg, in Spain, if you have a holiday home which you never rent out, they still demand that you pay tax on an imputed income. They also charge you a ‘wealth tax’ on all your world-wide income if you are resident in Spain, regardless of your income and whether you can afford to pay it.
I expect it of a country like Spain, but I really don’t want to see that kind of crap coming in here.
(and yes, Dan, I got my maths wrong. Well spotted. I was just testing you.)

"Hopefully it will get cleared up in the next few days" :rolleyes:

1319.gif

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Ros at her charming best. I am always quite surprised that anyone thinks writing to someone in that tone will have any other effect than to alienate the person.

In this example, the writer almost comes across as having no self awareness and a lack of appreciation for the consequences of her actions.

Oh. Wait a minute

Edited by MississippiJohnHurt

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I think Bosher is making a grammatical error.

I naturally have to assume that the only explanation for your reticence on the connection between Section 24 and rising rents is indicated in the language that you use when you refer to the PRS. You can’t do it without getting a dig in against us, can you? This is why you inserted the word ‘expensive’ before ‘private rents,’ in the quote above.

(Emphasis added)

If the quotation does not include any punctuation, the closing inverted commas should precede any punctuation marks that the sentence requires. Thus: She had already noticed that the “young man” looked about as young as the New Testament is new. Although he had been described as “fawnlike in his energy and playfulness”, “a stripling with all the vigour and freshness of youth”, and even as “every woman's dream toyboy”, he struck his companion-to-be as the kind of old man warned of by her mother as “not safe in taxis”. Where, now that she needed him, was “Mr Right”?

Source (The emphasis is in the original)

As the comma doesn't belong to the original quotation it should be outside the inverted comma; This is why you inserted the word ‘expensive’ before ‘private rents’, in the quote above.

However, it strikes me that the comma ought to be struck out too! The sentence is a bit of a dog's breakfast.

She then makes the same mistake again.

It seems you cannot express the term ‘private rents’ without making it pejorative (just like we are used to seeing the word ‘greedy’ before ‘landlords,’ and talk of us ‘raking in taxpayers’ money’ – we won’t be doing that when we stop housing people on benefits).

Also at the top she butchers convention in a different way.

‘Campbell Robb, the chief executive of the housing charity Shelter, which supported the research, said: “Even in these uncertain times, we can’t escape the simple fact that if the gap between expensive private rents and housing benefit continues to grow, thousands more families could be tipped into homelessness.”’

Use single ones only for quotations within quotations. Thus: “When I say ‘immediately', I mean some time before April,” said the spokesman.

For the relative placing of quotation marks and punctuation, follow Hart's rules. Thus, if an extract ends with a full stop or question-mark, put the punctuation before the closing inverted commas. His maxim was that “love follows laughter.” In this spirit came his opening gambit: “What's the difference between a buffalo and a bison?”

I can see how we get the errors if an irate author lets their frustration carry off their good judgement and starts banging away at Ctrl+V and whacking on inverted commas, but it's all a bit slapdash and second rate, isn't it?

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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