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Happy Section 24 Day

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*neither be able to pay the tax on rental income nor pay the capital gains tax as they've already withdrawn capital from their early purchases to pay for subsequent ones

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41 minutes ago, Muddlehead said:

What's the strategy for those landlords who will neither be able to pay the tax under the new regime? What will the banks and HMRC do?

Sympathy, patience and forbearance.

 

And sadly no, I'm not being ironic.

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I suppose it's a prisoners dilemma for banks. Call in loans as soon as possible and hasten a crash which is risky for the entire economy, but there is a higher probability of recovering something from the risky mortgages. Each bank has an incentive to do this, unless it believes all others will not.

 

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15 minutes ago, Dames said:

"Landlords’ ability to boost profits by increasing rents had proved constrained in a transparent and competitive rental market."

Also, the sky is blue, objects denser than the medium in which they are immersed fall downwards and bears shit in the woods.

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Can't believe I get to post this twice in a week (or so). This time its 100% for BTL Landlords

On 29 March 2017 at 9:15 PM, 24 year mortgage 8itch said:

 

 

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26 minutes ago, mathschoc said:

Genius. A lending book of £1bn for all residential in 2014, making them a proper minnow (a quarter of the size of West Brom). No disclosure in the 2014 accounts regarding the share of the lending book which is BTL, so proper pre-2008 under-rug-swept style. By 2016 the loan book is up to £1.4bn, still no BTL disclosure in the summary of the annual report for members, but check this out:

Quote

We grew our Society mortgage book by 14.8% in 2016 and our market share by around 10%.We had a record level of mortgage applications at over 400 million. We had record levels of new mortgage business at £282 million, up 28% on last year. Net new mortgage lending was up £148 million, which was more than 2014 and 2015, both themselves good years, put together. Total residential mortgage lending by the Society ended the year at £1.131 billion. This continues our trend of growth, serving customers. This was the founding purpose of building societies. This success was achieved through our expanding range of innovative mortgage products, from the Family Mortgage to help first time buyers through to the Retirement Lifestyle Booster for pensioners (described by Mortgage Solutions magazine as “potentially a game-changer”) and our Buy to Let offerings, and more active marketing to intermediaries to make them aware of what we have to offer. In November we were delighted to receive the Mortgage Finance Gazette Award for Mortgage Product Innovation, ahead of all other medium and large lenders.


We get most of our mortgage business via third party intermediaries. We have built a reputation with them for our underwriting process. We do not do this by computer, as our larger competitors do. In particular, we have built an expertise over many years of lending money to people in and into retirement.

(source)

Serving your customers by selling BTL through intermediaries, righto. The dream of the mutual lives on. Just exactly the kind of sophisticated lender we want to see ambulance chasing the PovertyLater jokers. FFS

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6 hours ago, Assume The Opposite said:

I know two people who will have to move due the landlord selling up.. 

Wonder if my old one will.:lol::lol:

 

 

Move? You mean they were MADE HOMELESS.

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1 hour ago, mathschoc said:

Happy S24 day in advance.

Hopefully I'll be corrected if I am wrong but the beauty of S24 is that, if anything, such BTL mortgage + linked savings account amplifies its impact, not reduces it!

As all rental income will now be taxable income, many of the landlords with multiple properties (or an actual real job) will be pushed into higher tax bracket.

Therefore, their tax-free savings income allowance will be reduced from £1000 (for basic rate tax-payers) to £500 (for higher rate tax-payers).

As a result, if they do receive more than £500 of interest on their savings, they will need to pay tax on the excess above £500 at 40%.

So while the linked savings account offers some flexibility, borrowing as little as possible in the first place appears to be a better strategy.

Ignoring all of the above, I am still not sure what the S24 angle of that account is.  After all, the whole point of S24 is taxing of rental income, and the account does not reduce the rental income.

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yay....:D I wish they would bring in rent caps and raise interest rates that would be hilarious.. imagine the anger.. 118 server would melt!

 

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Twas the night before Taxmas, when all through the house
Not a creature was stirring, not even a mouse.
The undies were hung by the lampshade with care,
In hopes that St Osborne soon would be there.

Merry Taxmas everyone!

 

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3 hours ago, Lambie said:

Twas the night before Taxmas, when all through the house
Not a creature was stirring, not even a mouse.
The undies were hung by the lampshade with care,
In hopes that St Osborne soon would be there.

Merry Taxmas everyone!

 

A Merry Taxmas to you too.

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In keeping with the joyous vibes on this thread this latest survey goes against some of the others that suggest things might not be so bad. 

 

Almost half of 'victimised' buy to let investors ready to quit

A new study of landlords reveals that far more believe they will be affected by today’s buy to let mortgage interest tax relief changes than government estimates - and almost half plan to quit the rental market by 2020, fearing they are being unfairly targeted.

Research by insurance firm AXA shows that more than 40 per cent of landlords believe they will be worse off as a result of the changes. This is despite the government’s assurances that 82 per cent will not have any additional tax to pay.

AXA found evidence that this change coming on top of a raft of legislation aimed at landlords in recent years means that almost half of private landlords will withdraw from the market by 2020.

Twenty one per cent said they plan to sell all their rental properties, 10 per cent will reduce their portfolio, and seven per cent will switch to commercial property ownership, which is perceived as a safer option.

A further eight per cent say they will transfer ownership of their rental property to their spouse or other family member who is in a lower tax bracket as a way of avoiding extra tax.

Two thirds of landlords surveyed said they feel stigmatised for running a rental business, and just over half directly quoted government policy as a source of this stigma.

The results suggest that just four per cent of private landlords have a portfolio big enough to be able to give up work and live off the proceeds. The average UK landlord makes £343 rental profit each month after expenses, with juge regional variations ranging from £297 in the West Midlands to £713 in London.

“Landlords have been subject to one piece of new legislation after another in recent years, much of it very complex indeed”, says Gordon Rutherford of AXA Insurance.

“We see a real confusion as to what the new tax changes will mean, with government and landlords giving very different estimates of the impact. We need to remember that few landlords are professional property tycoons: two thirds in the UK are ‘accidental’ landlords.

“They tend to own just one rental property that they’ve inherited or are finding hard to sell, and they make a modest income once time and expenses are out. They do feel increasingly apprehensive, as we can see from the numbers thinking of withdrawing their properties from the rental market in the coming years.”

https://www.lettingagenttoday.co.uk/breaking-news/2017/4/almost-half-of-victimised-buy-to-let-investors-ready-to-quit

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4 hours ago, AvoidDebt said:

They tend to own just one rental property that they’ve inherited or are finding hard to sell

Bit of free financial advice: if you're finding a house 'hard to sell'...REDUCE THE ASKING PRICE.

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6 minutes ago, btd1981 said:

Bit of free financial advice: if you're finding a house 'hard to sell'...REDUCE THE ASKING PRICE.

Nope.. they won't listen. I am holding up to my advice "call insolvency practitioner" until Jan 2019.

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38 minutes ago, hotairmail said:

 

Half of all landlords didn't realise there was tax to pay in the first place, so maybe this has brought it to their attention.

 

EDIT: Does my daughter's landlord pay tax on a property in London, as a Chinese lady living in Canada?

There are two options for the LL, she can opt for self assessment by filling NRL1i form and hand it over to the tenant/LA to get the rent in full or the letting agent / tenant deducts the basic rate tax by law. If there is no LA involved in your daughter's and not deducting taxes she is breaching the law.

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