Browse All Tribes or choose a Tribe below:
By signing up I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Sign Up With Facebook, Twitter, or Google
By signing up, I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Don't have an account? Sign Up
To reset your password just enter the email address you registered with and we'll send you a link to access a new password.
I have just done my accounts for 2018-19.
I have had a bad year with multiple voids, expensive refurbs and even more expensive repairs.
This has left me with a small profit of £19 using generally accepted accounting principles.
However according to the Conservatives Alice in wonderland economics I am liable for tax on a profit of £5545. I get 20% relief on 50% of the finance costs, -£1165 = £4380.
£4380/£19 is 23,052 percent increase in tax liability.
I liked George Osbourne's pension reforms but this ill conceived nonsense is destroying the PRS.
I guess that was the general idea?
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I have amended my post as I had not accounted for the 20% relief on 50% of the finance costs.
I would be 40% tax payer except that I try and make enough pension contributions to take me below the threshold.
For 2018-19 interest relief is limited to 50%. It will be 25% this year and 0% in 2021.
I have non-property income below the 40% threshold of £46350 which is taxed at 20%.The £5545 imaginary 'profit' pushes me into the 40% tax band.50% of the finance costs have already been accounted for in working out the BS £5545 figure.However my tax liability is not on the real profit of £19, my liability is around 17% of £5545 = £941. Some of the £5545 is taxed at 0% but most is taxed at 20%.Another way of calculating this is to look at the tax liability pre-S24 = £19 x 20% = £4.The liability is now £941.941/4 = 23,535% increase.
I would think there are many LL's in the SE who were just about keeping their heads above the water before S24. Now they will either have to subsidise their portfolios from non-property income, go bankrupt or be driven out of the sector.
Send this to your MP and ask him/her to explain how this is a just and fair tax system.
One minister recently stated: "The Government has no responsibility to treat people fairly". I can't remember the context but we all know where we stand now.
I dont think he was out to destroy the PRS .
He wanted it contained and brought into line and he is succeeding in that goal
Whilst it hurts and some will be crucified there is a greater good one can argue
Fergus Wilson had about 1000 BTL units . He dominated a town
He could serve a sec 21 on a whim and make 1000 people homeless in 2 mths
That kind of catastrophic power in the hands of one person is not good
Especially if they don`t wield that power with wisdom
If action hadnt been taken to curb BTL`ers there would be 100 FW`s in 10 or 20 years time
Imagine 100 towns each with a landlord with a 1000 properties
Imagine they clubbed together and plotted to increase their power and influence
The growth of BTL`ers was growing exponentially
Society could not allow that amount of power over peoples lives to be in the hands of a few
So George taxed us heavily to stunt our growth .
We are duly stunted
Jonathan Clarke. http://www.buytoletmk.com