Buy-To-Let Investors To Challenge Tax Hike In Court --- Merged Threads

[Fairyland]

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12067842/Buy-to-let-investors-to-challenge-tax-hike-in-court.html

Mods, I thought this deserved a separate thread but feel free to merge into the Other BTL regrouping thread.

Edited December 26, 2015 by Fairyland

[Fairyland]

Landlords are clubbing together to fight the Tory's tax hike and they have appointed Cherie Blair's law firm to help them

Wealthy property investors are mounting a legal challenge to the Government's proposals to increase tax on buy-to-let investments.

They hope a judicial review will overturn the controversial "Clause 24" of the 2015 Finance Bill, in which the Government introduced plans to prevent landlords offsetting mortgage interest costs against rental profits before calculating tax.

These tax changes, which will apply to existing investment properties as well as future purchases, will result in some buy-to-let investors paying tax even where they generate no profit or are loss-making.

In this case the judicial review a legal process in which a court reviews legislation or administrative decisions needs to be submitted by February 17, 2016.

The challenge is being led by millionaire private landlords Steve Bolton and Mark Alexander.

Mr Bolton, who owns about 20 residential and commercial properties, is also the founder and owner of Platinum Property, a buy-to-let training franchise whose members' portfolios are worth a total £200m.

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Mark Alexander is founder of online buy-to-let forum Property118.

The third figure involved in the action is Chris Cooper, a modest investor and part-time landlord who - like hundreds of thousands of others - is using buy-to-let as part of his pension.

In an ironic twist law firm Omnia Strategy, founded and chaired by Cherie Blair QC, the wife of Tony Blair, has been appointed to represent landlords' interests.

Scroll down for a worked example of how the tax change will impact buy-to-let investors

Use Telegraph Money's buy-to-let calculator to see how your own property investments will be affected

Landlords will argue that the Tory's tax move flouts "a long-established principle of taxation that expenses incurred wholly and exclusively for the purposes of the business are deductible when calculating the taxable profits".

Although buy-to-let investors have met with little support from any political party, their objections to the tax changes are widely supported by the accounting and legal professions.

The Institute of Chartered Accountants in England & Wales (ICAEW) has attacked the removal of mortgage interest relief as "unreasonable, unworkable and unthought through".

It has pointed out that those worst-hit will be small property investors, including middle-class savers adding one or two buy-to-let properties to their pensions and other portfolios.

Buy-to-let tax will cut our income by 25pc'

Large companies investing in residential property will be unaffected and will continue claiming tax relief.

Wealthy landlords investing with cash, rather than using mortgages, will also be untouched.

The ICAEW said this factor could exacerbate the property crisis and make it more difficult for first-time buyers. The interest relief restriction will favour cash buyers who want to buy to let and may increase the competition even more at the lower end of the property market, hindering first-time buyers.

The professional body also warned that tenants would be hit with higher rents.

Steve Bolton

Steve Bolton said: Its not clear why the Government has chosen to attack only buy-to-let owner-operators with mortgages. Not only is it unfair, but we believe that it could also be unlawful."

Another large investor close to the legal challenge said "it is ironic that buy-to-let investors, who are as a group almost all Tory voters, are using a law firm founded by a Labour leader's wife to fight a Tory policy."

Cherie Blair's health business Mee Healthcare company goes bust

Cherie Blair Clara Molden

It is not known whether Cherie Blair is personally aware of the case, but her own buy-to-let investments have in the past attracted publicity and criticism.

Along with her husband Tony, Cherie Blair reportedly owns properties worth over £30m in a portfolio which has included buy-to-let flats in Bristol and Manchester.

10 towns most affected by the new buy-to-let tax

The action is initially being financed by Mr Bolton and Mr Cooper but funds are being raised from other investors via crowdfunding website Crowd Justice.

Edited December 26, 2015 by Fairyland

[Venger]

I just hope I didn't give them the idea.

There was absolutely nothing on either of the big BTLer forums about JR before I posted this. Now they're all over it.

Only posted it because was so amused at post after post of BTLers expecting solicitors to read their whine and give them free advice.

All this letter writing to lawyers for advice.

I just outlined some of it to a solicitor (the very basics.. challenging Gov on a matter - and was told sounds like they're seeking a Judicial Review) and they told me on a complicated matter they would seek £1,000 - £3,000 on account for an initial view (hours to review papers and establish position, if very technical) - or (and they would most likely do this) refer to specialist counsel to advise - and there will different views there, perhaps more so in public access barristers.

In landlord land though, looks like you write a long letter and expect to get free review.

http://www.property118.com/budget-2015-landlords-reactions/76164/comment-page-604/#comment-68805

And as for recent claim by one of the journos that legal profession object to the tax changers; load of rubbish. Individuals. Tell me when Law Society comes out against it. Or the SRA. As a whole. To summarise that most against it is rubbish. Individuals; obviously some older equity partners at the top may be against it having had the life... house bought cheap decades ago, place abroad, big spending... some with property VI clients. Younger ones, renter-savers.. no way. (And on the whole, same in accountancy / banking - one BTLer smugging he has 4 bankers sharing his London rental house - even the Treasury lead involved for submissions behind the changes was on younger side studying for accountancy qualification).

And there's a older senior solicitor in Kensington I know of with 10 BTLs (know from the BTLer forums) who was in a bind even before all this, with tracker increase. Course he's against it, if he's not about to fail in personal level soon enough, the BTLer greedster.

[Venger]

Let them waste more money on it... should be selling imo.

[Ah-so]

I hope you had a good Christmas Day.

Today is Boxing Day, the day when the Private Rented Sector begins to fight backagainst the outrageous discrimination shown to us by Government, political organisations masquerading as housing charities and charitable think tanks (not to mention anarchistic forums organised to discredit tarnish the reputation of destroy all private rented sector housing providers.

Earlier this week Property118 exposed the source which influenced Chancellor George Osborne’s new tax legislation (affecting private housing providers who, just like you and me, are funded by Buy-to-Let mortgages) was in fact a young researcher, fresh out of University with a Geography degree. No doubt you find that as nauseating as I do.

Later today I will be travelling to Russia to visit in-laws and to celebrate Orthodox Christmas on 7th Jan, I will be back on 19th January 2016. Meanwhile, fund-raising commenced at 1am today to take George Osborne’s discriminatory treatment of private landlords to Judicial Review, and if necessary to the European Courts of Justice.

Please see the Press Release below, link through to the Crowd Justice website and make a pledge to fight back. We are fighting for the future of Buy-to-Let as we know it. The founders of Property118.com have pledged £1,000 to get the fund-raising off to a good start. Now it’s down to each and every person reading this email to do their bit.

Make a pledge, email this newsletter to every landlord you know, share the Crowd Justice campaign on Facebook, Twitter, forums and any other social media you use. Set yourself a target to raise as much money as possible for this campaign, my personal goal is to raise at least £10,000 by the end of January from my professional contacts. Talk to your mortgage broker, your accountant, your letting agent and anybody else who provides a service to your letting business. Their future depends on the success of this campaign too.

Good luck!

Together, let’s do everything in our power to make 2016 and many more years to come better for the property letting sector.

Lets [sic] – Fight – Back!

All the best

Mark Alexander – founder of Property118.com

https://www.crowdjustice.co.uk/case/clause24/

[The Knimbies who say No]

Let them waste more money on it... should be selling imo.

If I were a LL I'd consider contributing a small sum to the fund and be offloading everything simultaneously as the prospect of a legal challenge, however hare-brained in concept, could help keep some LLs away from the market in the expectation of a positive result. Couple of months headstart.

[Killer Bunny]

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/12067842/Buy-to-let-investors-to-challenge-tax-hike-in-court.html

Er, why is it 'ironic' Cherie Blair is representing them? She's a massive property investor.

[The Knimbies who say No]

Er, why is it 'ironic' Cherie Blair is representing them? She's a massive property investor.

I'm guessing it is because when the tax relief stuff was announced, the BTLers were often heard saying how annoyed they were at having voted Conservative, and now finding Osborne stiffing them.

Any port in a storm, eh?

Edited December 26, 2015 by The Knimbies who say No

[sPinwheel]

I'm not sure there's a big enough bucket of popcorn for this one.

Edited December 26, 2015 by sPinwheel

[Venger]

If I were a LL I'd consider contributing a small sum to the fund and be offloading everything simultaneously as the prospect of a legal challenge, however hare-brained in concept, could help keep some LLs away from the market in the expectation of a positive result. Couple of months headstart.

Get your thinking TKwsN (clever), but suspect this hasn't happened.

Still full belief in themselves, and property, and their good for society. Lapping up 5-8% HPI++++ for next year from many a EA/housing group.

One low-leveraged BTLer we had on here, thinks it will be buying opportunity for him (3% hike hadn't been announced at that time), and that whatever happens, prices will be well up in 20 years (magic of forever HPI).

[Si1]

Can you imagine the joy on Osborne's face when poor old Mrs Blair loses .... and she must of course be supporting this good cause pro bono ... it is 'human rights' after all.

The hooman rights lawyer married to a former PM who used utterly false pretences to start a war in a poor country?

[Venger]

Er, why is it 'ironic' Cherie Blair is representing them? She's a massive property investor.

Make your mind up. It's amusing because perhaps her HPI position is under threat, and accepting this case, and it going through her.

According to you, it seems to me, Conservatives there to protect her position in property.

Yet BTLers squealing and case going through her firm. I think you're being cynical to the point of it affecting positive outlook for renter-saver HPCers... even if you see HPC coming in a different way.

I'm not at all convinced by the idea that Osborne's seen the demographic light. If he had he would want HPC. He doesn't.

He just wants small players out so Pte Eq big boys and institutions in.

In US Pte Eq buying vast tracts of homes. Tony Blair has reputedly 30 homes. Yes I do see this as material.

Why is another local conservative councillor (and landlord) having a go at him if it's so much the party line?

Accept some good stuff when it happens, imo, instead of looking for the negative.

Conservatives are not there to protect Blair's HPI - you're wrong.

And yes. They are. And protect their own HPs.

[Venger]

It could be amusing to see a double slap-down of a big BTLer/HPIer,

and the BTLers going through that firm/chambers, when JR fails.

Edited December 26, 2015 by Venger

[frederico]

That's a really good idea , for all the laws you don't like, take them to court and get them repealed. Sounds a good plan.

[interestrateripoff]

Large companies investing in residential property will be unaffected and will continue claiming tax relief.

Is this the case? If so there perhaps is scope for a challenge as it can be viewed as unfair. Although this ignores the wider issue of fairness that "homeowners" don't get the same type of tax benefits either.

[Si1]

Is this the case? If so there perhaps is scope for a challenge as it can be viewed as unfair. Although this ignores the wider issue of fairness that "homeowners" don't get the same type of tax benefits either.

Judicial review would not cover this, it only checks, AFAIK, whether due process has been followed establishing the new legislation

[Venger]

Is this the case? If so there perhaps is scope for a challenge as it can be viewed as unfair. Although this ignores the wider issue of fairness that "homeowners" don't get the same type of tax benefits either.

We don't know yet. Full details not announced. I suspect it won't affect insurance-companies who hold blocks of rental housing, Salvation Army with all their houses, or build to rent etc.

[Killer Bunny]

Make your mind up. It's amusing because perhaps her HPI position is under threat, and accepting this case, and it going through her.

According to you, it seems to me, Conservatives there to protect her position in property.

Yet BTLers squealing and case going through her firm. I think you're being cynical to the point of it affecting positive outlook for renter-saver HPCers... even if you see HPC coming in a different way.

Jeez!

They're all the f'g same. How us this not patently obvious?

[Venger]

Jeez!

They're all the f'g same. How us this not patently obvious?

No they are not. They are individuals. And at higher levels in CBs and Govs, they have policy outcomes to think of for the wider good of the country than just themselves. That could be HPC and fresh lending in volume, then yearly high number of transactions. It's happened before. All the £Trillions in smug equity on owner side, especially older owner side, is earning banks no money. There are motivations, for health of economy and core financial insitutions to allow a correction, despite some policitians themselves being hit by it.

Can you not explain clearly, what you mean. What does that even mean? They're all the same. They haven't been in the past, and they aren't now. Got tired of that all the same in 2003 tbh. The HPI++++ happened under Labour and that's a fact. Hague and Howard were drowned out when they showed caution for Government spending, and still arguing for bringing it down. Recent HPI++++ may have been to smooth out risk from core-financial institutions, onto a BTLer fest last few years. If needs be the HTBers can be bailed out. Profits from HPC and fresh lending... well it's loose change to help out the HTBers if needed.

Because they all own houses toward the higher end, they're all the same. They're not all the same. Remind me what pledges Labour were offering in run up to the GE for renter-savers. Very very little imo.

If it was all about protecting Blairs property interests, then surely Clause 24 something of a threat to it. Amusing it's her firm they've approached / taken it on, for me. And markets move at the margin.

[Venger]

...all the same..... whilst Labour were glorying on about billions more for this and billions more for that.....

1 October 2005

Departing Tory leader Michael Howard said he believes only an economic slump can return the Conservatives to power.

He told the paper: "When most people are relatively content with their economic lot, it is very hard for an opposition to win elections.

"I don't want the economy to go down the pan - I care about the country and I don't want anybody to go through any economic difficulties.

http://news.bbc.co.u...ics/4299490.stm

Howard 2004.

"We must get a grip on public spending, cut back on waste, reduce regulation and cut taxes."

Mr Howard accused Chancellor Gordon Brown of favouring a European-style economic model of heavy regulation and high taxes rather than what he said was a more flexible and competitive US-style capitalism.

The Conservative leader stopped short of committing himself to specific tax cuts if he comes to power.

But he said Conservative plans to cut regulation and waste and reduce the rate of growth in public spending would "get us to a position where we can actually start to reduce taxes".

http://news.bbc.co.u...ics/3552169.stm

Hague spelling out the mess Labour were creating, in year 2000. One bit from many relevant parts.

William Hague
They clearly can be delivered. When we say that we will run Whitehall and the whole machinery of government for £1.8bn less - we were doing it three years ago - you don't have to look into a crystal ball - you can read the book. Things don't change. Are people receiving a better service from Government departments today than three and a half years ago? No of course they're not, but there are thousands of more civil servants and the cost has gone up by nearly £2bn.

http://www.bbc.co.uk...ektrans07.shtml

[65243]

I'd say they have an arguable case at the least.

See http://www.housepricecrash.co.uk/forum/index.php?/topic/205642-btl-scum-regrouping-and-on-the-offensive-merged/?p=1102807826

[mmt]

I'd say they have an arguable case at the least.

See http://www.housepricecrash.co.uk/forum/index.php?/topic/205642-btl-scum-regrouping-and-on-the-offensive-merged/?p=1102807826

No. They have the option of paying off the mortgage and still enjoying the property just fine.

[Si1]

I'd say they have an arguable case at the least.

See http://www.housepricecrash.co.uk/forum/index.php?/topic/205642-btl-scum-regrouping-and-on-the-offensive-merged/?p=1102807826

Do you have this on any authority other than yourself?

[Venger]

Let them argue it then, mr adversarial and inquisitorial legal systems.

It's already passed through both Houses and is now law.

There's also the squeeze to BTL positions/lending from Europe as well.

http://www.housepricecrash.co.uk/forum/index.php?/topic/201726-will-buy-to-let-investors-be-caught-out-by-eu-rules/

And in the works since at least 2011.

Seem to recall 118 even led a petition against this, when perhaps they should have been bailing, or bailed when WB tracker changes... instead of hanging on and buying more all the time.

2011 http://www.property118.com/nearly-3000-sign-up-for-petition-against-buy-to-let-mortgage-laws/22461/

As well as petition re tracker rates more recently.

So let them take it to an even higher court after JR fails.

[Si1]

Let them argue it then, mr adversarial and inquisitorial legal systems.

It's already passed through both Houses and is now law.

There's also the squeeze to BTL positions/lending from Europe as well.

http://www.housepricecrash.co.uk/forum/index.php?/topic/201726-will-buy-to-let-investors-be-caught-out-by-eu-rules/

And in the works since at least 2011.

Seem to recall 118 even led a petition against this, when perhaps they should have been bailing, or bailed when WB tracker changes... instead of hanging on and buying more all the time.

2011 http://www.property118.com/nearly-3000-sign-up-for-petition-against-buy-to-let-mortgage-laws/22461/

As well as petition re tracker rates more recently.

So let them take it to an even higher court after JR fails.

We only have survivor bias left. If they grimly held on through the credit crunch, even doubling down, then nothing will ever make them cash in their chips. Misplaced faith.