The greatest thread of all...The BTL running for the exit thread

[hi5lo5]

http://forums.moneysavingexpert.com/showthread.php?t=5779893

 

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 April. So I need to pay rental income tax between 01/04/2016 - 31/03/2017. 

I am filling my selfaccessment form at the moment and would like to know what can be included as rental income deduction/relief for tax payment purpose. I listed the items i know:

• service charge, lease hold
• ground rent, lease hold
• Mortgage - interest only
• Any agency fee related, as it is managed by an agency.

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?


I need to work out all expenses to see if it is more than £7500 to decide if I need to use rent-a-room scheme. 



Thanks eveyrone in advance!
Dawei

 

[Ash4781]

Paragon Banking Group PLC update 

 

[Houdini]

So btl loans are heading towards paragon and other second tier banks all of whom can just be closed down when they go belly up.

[hi5lo5]

2 hours ago, Houdini said:

So btl loans are heading towards paragon and other second tier banks all of whom can just be closed down when they go belly up.

Paragon's Aggregate outstanding TFS drawings as at 30/09/2017  is £700 million.

[Dyson Fury]

11 hours ago, hi5lo5 said:

http://forums.moneysavingexpert.com/showthread.php?t=5779893

 

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 April. So I need to pay rental income tax between 01/04/2016 - 31/03/2017. 

I am filling my selfaccessment form at the moment and would like to know what can be included as rental income deduction/relief for tax payment purpose. I listed the items i know:

• service charge, lease hold
• ground rent, lease hold
• Mortgage - interest only
• Any agency fee related, as it is managed by an agency.

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?


I need to work out all expenses to see if it is more than £7500 to decide if I need to use rent-a-room scheme. 



Thanks eveyrone in advance!
Dawei

 

Quote

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?
not allowed, in no way shape or form is that a business related expense, anymore than the cost of your food you eat whilst living there is a business cost

But this can't be right, he is running a business here moosh, and if he has to live in another city for his business then surely his rental costs must be tax-deductible like for any other business, and all his food and drink costs (why no mention of light and heat, what about clothing and footwear) - because how can a business entrepreneur create wealth without some tax incentives like every other business gets, especially Osbourne and his mates in the City (continued on tribes, 118 and every other thread )

[Fence]

20 hours ago, hi5lo5 said:

http://forums.moneysavingexpert.com/showthread.php?t=5779893

 

Hi Everyone,,......

Un-effing believable!

[sisyphal]

Heard an anecdotal about an 'accidental' landlord. 

Had a flat, moved to a house but rented the flat out.  Didn't declare or pay tax on the rent.  Went on like this for the best part of a decade.

Recently sold the flat.  At which point he comes the the attention of HMRC.

Had to go through a hellish, detailed and lengthy investigation.  Ends up having to pay a huge amount of money.  Capital Gains, Unpaid tax, Penalties and Interest.

There are going to be a lot of people who think they've got away with it that are in for one heck of a shock and a massive bill. 

 

[Bland Unsight]

8 minutes ago, sisyphal said:

Heard an anecdotal about an 'accidental' landlord. 

Had a flat, moved to a house but rented the flat out.  Didn't declare or pay tax on the rent.  Went on like this for the best part of a decade.

Recently sold the flat.  At which point he comes the the attention of HMRC.

Had to go through a hellish, detailed and lengthy investigation.  Ends up having to pay a huge amount of money.  Capital Gains, Unpaid tax, Penalties and Interest.

There are going to be a lot of people who think they've got away with it that are in for one heck of a shock and a massive bill. 

 

Buy-to-let leaves an audit trail you can see from orbit.

Once the IT is set up you just write an algorithm to trawl the data returns and push out the letters. The marginal cost of sending each "It is time to shit yourself" letter to some daft amateur landlord is effectively zero. Presumably it is literally five minutes work for a Revenue employee to look over a file and estimate the CGT due. Do forty before lunch. If there have been decent gains then the GCT alone is worth chasing and any income tax owing is just a bonus.

The government have been showing every sign of chasing these morons as an easy pocket to tap since 2011 but  I suspect that the actual income to the Exchequer has, as of today, barely begun to climb towards its eventual peak.

The politics of mugging these BTL herberts is essentially irresistible. The miracle is that it didn't happen years ago.

[HowMuch!]

single property landlord at work was telling me there is not tax to pay on their rental income because it comes in below the 7500 rent a room limit.

Must be 1000s of LL out there that are claiming to live in the residence.

[thewig]

they are not landlords, they are DEBTjunkies

[spacedin]

1 hour ago, Beary McBearface said:

Buy-to-let leaves an audit trail you can see from orbit.

Once the IT is set up you just write an algorithm to trawl the data returns and push out the letters. The marginal cost of sending each "It is time to shit yourself" letter to some daft amateur landlord is effectively zero. Presumably it is literally five minutes work for a Revenue employee to look over a file and estimate the CGT due. Do forty before lunch. If there have been decent gains then the GCT alone is worth chasing and any income tax owing is just a bonus.

The government have been showing every sign of chasing these morons as an easy pocket to tap since 2011 but  I suspect that the actual income to the Exchequer has, as of today, barely begun to climb towards its eventual peak.

The politics of mugging these BTL herberts is essentially irresistible. The miracle is that it didn't happen years ago.

But why don't they prosecute a few of them. Not declaring rental income to avoid being taxed is tax evasion, an open and shut case. 

Edited January 24, 2018 by spacedin

[SE10]

53 minutes ago, spacedin said:

But why don't they prosecute a few of them. Not declaring rental income to avoid being taxed is tax evasion, an open and shut case. 

Quite... pour encourager les autres

[Ah-so]

8 hours ago, HowMuch! said:

single property landlord at work was telling me there is not tax to pay on their rental income because it comes in below the 7500 rent a room limit.

Must be 1000s of LL out there that are claiming to live in the residence.

Idiot if they think that they can get away with it. As noted above, it is easy to identify and the audit trail cannot be eradicated. Once checking of that sort of thing is fully automated, the truth will come out.

[spyguy]

8 hours ago, spacedin said:

But why don't they prosecute a few of them. Not declaring rental income to avoid being taxed is tax evasion, an open and shut case. 

Until S24 theyve had no reason to go after them - until a a property was sold.

HMRC has got to think there's money to recover before kicking off an investigation.

Sure they ought to be decalring rental income but if that income was matched by mortgasge payments then there was no tax to collect.

[Ah-so]

1 hour ago, spyguy said:

Until S24 theyve had no reason to go after them - until a a property was sold.

HMRC has got to think there's money to recover before kicking off an investigation.

Sure they ought to be decalring rental income but if that income was matched by mortgasge payments then there was no tax to collect.

Guy I know settled for over £70k with HMRC due to undeclared BTL income. Plenty have been drawing a healthy income.

[hi5lo5]

https://www.propertytribes.com/btl-where-figures-dont-stack-help-t-127632778.html

This is the one of the days many in this forum have been waiting for it. PRA is doing the magic. 

Hi all,

I'm hoping someone may be able to offer some advice on this please....  We've seen a house in a particular area we'd like to buy as a long term investment where (unusually) we are not bothered about making a return as our intention would be to rent it to a family member at a slightly less than market rent so they can rent it for as long as they want and have complete surety of tenure.  House is a 3 bed for around £260k and we'd be looking for a 75% LTV mortgage of £195k, although a LTV of 80% would be preferable..

My usual broker has come up with a TMW product which is a no fee five yr fix at 3.09% which would be easily affordable at £502pcm.  As we have quite a few BTL mortgages TMW is possibly the only lender we can consider unless someone knows differently?

But, according to TMW criteria the minimum rent would have to be £195k x 5% x 1.45 = £14,137/yr or £1178pcm and the true market rent would probably be around £950pcm max.  Therefore, assuming they do their due diligence and check on the rent returns for that area it seems likely that the maximum loan we would be able to borrow on that property would be around £160k which would mean us putting down £100k which is more than we either want to or can afford.  Annoyingly, apparently if we were newbie LL's the factor TMW would apply would be £195k x 5% x 1.25 = £12187/yr or £1015pcm - this seems to me to be to be the wrong way round as we are therefore being penalised for being more experienced?

Can anybody think of another way we might be able to finance this or another lender who may be prepared to lend to us without such a high rent required?

Your input, as always will be appreciated - thanks.

 

[hi5lo5]

49 minutes ago, Ah-so said:

Guy I know settled for over £70k with HMRC due to undeclared BTL income. Plenty have been drawing a healthy income.

Until HMRC finds out.

Edited January 25, 2018 by hi5lo5

[spyguy]

20 minutes ago, hi5lo5 said:

https://www.propertytribes.com/btl-where-figures-dont-stack-help-t-127632778.html

This is the one of the days many in this forum have been waiting for it. PRA is doing the magic. 

Hi all,

I'm hoping someone may be able to offer some advice on this please....  We've seen a house in a particular area we'd like to buy as a long term investment where (unusually) we are not bothered about making a return as our intention would be to rent it to a family member at a slightly less than market rent so they can rent it for as long as they want and have complete surety of tenure.  House is a 3 bed for around £260k and we'd be looking for a 75% LTV mortgage of £195k, although a LTV of 80% would be preferable..

My usual broker has come up with a TMW product which is a no fee five yr fix at 3.09% which would be easily affordable at £502pcm.  As we have quite a few BTL mortgages TMW is possibly the only lender we can consider unless someone knows differently?

But, according to TMW criteria the minimum rent would have to be £195k x 5% x 1.45 = £14,137/yr or £1178pcm and the true market rent would probably be around £950pcm max.  Therefore, assuming they do their due diligence and check on the rent returns for that area it seems likely that the maximum loan we would be able to borrow on that property would be around £160k which would mean us putting down £100k which is more than we either want to or can afford.  Annoyingly, apparently if we were newbie LL's the factor TMW would apply would be £195k x 5% x 1.25 = £12187/yr or £1015pcm - this seems to me to be to be the wrong way round as we are therefore being penalised for being more experienced?

Can anybody think of another way we might be able to finance this or another lender who may be prepared to lend to us without such a high rent required?

Your input, as always will be appreciated - thanks.

 

Err, the idiots griping about ~200/m difference between a newbie moron and an experienced moron.

'We've seen a house in a particular area we'd like to buy as a long term investment where (unusually) we are not bothered about making a return as our intention would be to rent it to a family member at a slightly less than market rent so they can rent it for as long as they want and have complete surety of tenure.  House is a 3 bed for around £260k and we'd be looking for a 75% LTV mortgage of £195k,'

Id question how secure a tenancy is with an IO BTL mortgage FFS.

 

[thewig]

These DEBTjunkies are properly addicted. 

 

What I cannot fathom is since when did DEBT become like crack to the majority?

 

 

[spacedin]

3 hours ago, spyguy said:

Until S24 theyve had no reason to go after them - until a a property was sold.

HMRC has got to think there's money to recover before kicking off an investigation.

Sure they ought to be decalring rental income but if that income was matched by mortgasge payments then there was no tax to collect.

Yeah I agree, as I said, if they are actually trying to avoid being taxed. They definitely have a rude awakening on the horizon. 

[spyguy]

58 minutes ago, thewig said:

These DEBTjunkies are properly addicted. 

 

What I cannot fathom is since when did DEBT become like crack to the majority?

 

 

2002.

[thewig]

2 minutes ago, spyguy said:

2002.

[Neverwhere]

11 hours ago, hi5lo5 said:

But, according to TMW criteria the minimum rent would have to be £195k x 5% x 1.45 = £14,137/yr or £1178pcm and the true market rent would probably be around £950pcm max [. . .] Annoyingly, apparently if we were newbie LL's the factor TMW would apply would be £195k x 5% x 1.25 = £12187/yr or £1015pcm

Nice to see that "newbie" landlords wouldn't be able to purchase it at a 75% LTV either.

[Bland Unsight]

11 hours ago, hi5lo5 said:

this seems to me to be to be the wrong way round as we are therefore being penalised for being more experienced?

That's classy. What they are proposing is mortgage fraud.

"I'm gutted that they won't let me do some mortgage fraud. Look at all the experience I have of getting mortgages. You'd think they'd recognise the business genius it takes to borrow money secured on a house. Two years of graduate school in Phoning My Mortgage Broker studies. I wrote a PhD thesis on how to drive a white Range Rover Evoque down to the mortgage broker's office. I practised signing my name on forms for a solid six months; I signed napkins, my forehead - I even signed the cat. When I knew I was ready before I got serious and started signing mortgage application forms for reals."

I accept that these BTL cretins are not all total morons but a lot of them are 99.9% moron.

[thewig]

Dream job: DEBTjunkie

Experience: DEBT

 

"when can you start?"