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  • Tax

    George you have made me a Tax Dodger

    I know when I do my Tax return I have always used the Land and Property Pages

    I have never paid NI on BTL profits ?? so I would have thought I was Not a Business but am I doing something wrong

    am I filling in the wrong pages

    I tell you what if BTL was classed as self employment and a Business I would fund my pension even more 

    But I don't think I can do that other than invest £3600 per year in pension


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    Learn Change and Adapt ?????


    As I said some parts of the tax system class letting as a business and some parts don't. Some of the laws have a definition included, some don't and rely on the english meaning such as the rule on incorporation relief. You are "not a business" but you also are "a business".

    As far as NI goes the rule used to be that if your property activity amounted to a business you would have to pay. The Ramsay case about incorporation tax extended the definition of business to include more property ones, and unintentionally extended the number of landlords liable to NI. So in 2015 the law was changed to exclude them.

    It would have made no difference to pensions though. Only certain types of income qualify and rents are not one, whether or not your property activity counts as a business.


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    I can only comment on myself personally and the advice given to me by my tax advisor and an my accountant

    both say I am not self employed

    I am not a professional as you must be with the knowledge you have on this topic peter  

    I asked my Tax advisor if I Could use the Ramsey case and he explained to me it was not the way forward to me

    But if you know more I would like to contact you so you can run tis past me again in detail  

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    Learn Change and Adapt ?????


    I am not a professional, just somebody experienced in researching things online who had an interest in the topic.

    From Property118

    “In summary:

    • Letting property may amount to being in business, but if it does not, there is not (and never has been) a liability or entitlement to pay Class 2 NIC.
    •  If letting property does amount to a business, but not a trade, it makes the landlord a self-employed earner eligible to pay Class 2 NIC (he or she would have been liable to pay Class 2 before 6 April 2015).
    • Where the letting business is also a trade because it includes more than property letting, the profits are liable to compulsory Class 2 and Class 4 if the trading profits exceed the relevant thresholds”

    If Ramsay did not apply to you because what you did would not have amounted to a business then you were not self-employed as far a NI goes.

    But you may be for other purposes.

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    I took advice from a Large Practice of Accountants  who have a Tax Advisor He is also and ex Rep for the NLA and attends all the NLA meetings

    He looked at my business in great detail asking some quite searching about what my long term plans were

    We had a good Chat about the Ramsey case and advised me that they thought when it was first announced it that it would work for Landlords

    In a Nutshell he advised me that there are a number of stages of which HMRC work the Ramsey case did go through But the Revenue still has a chance of challenging it

    Its complicated and I am no expert but he advised me not to go down that road

    I am happy to take the advice of a professional I listen to what is said and then I go back to him and run the topic past him and ask for his approval if I was to use something from the internet

    I also work the the Accountant from the same practice again a very experienced accountant in the ins and outs of company accounts

    I can say this there is a lot of miss information on PT and 118 and others from well meaning Landlords but I always fall back to the professionals I have around me in business

    The Business I run is very large and I have to be certain of my facts before I do anything

    It reminds me of folk using Google for medical problems who self diagnoses and then go to there GP and inform them what's wrong with them

    Normally they are wrong according to the GMC and cause patients issues and worry

    I have the feeling professional advisers have simier  issues with Landlords its good to talk things through but with taxation its important you and I get it right



     




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    Learn Change and Adapt ?????


    Peter, how is price rises tax free income? Isn't CGT tax? Or am I missing something?

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    The system was basically

    1. Buy a property with a mortgage
    2. The price rises
    3. Remortgage based on the higher value
    4. Do what you like with the extra money.

    There is no CGT on remortgaging. only on selling. So you might think this was only deferring the tax, but when you die all CGT liability goes away.

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    It would be very easy to make any remortgage above the purchase price subject to CGT, in many ways I am surprised that it doesn’t apply.

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    I suspect it would be hard to stop people finding a way around such a rule.

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    DL;

    You say you have played by the the rules with the three line account process.

    Well you do realise that you are one of the little people that does pay tax to keep the UK afloat!

    Have you seen how little tax the usual suspects  have been avoiding in tax!?

    I just wish I could stop using

    Ebay

    Google

    Amazon  etc

    Mind you I refuse to use Starbucks  or Cafe Nero.

    But I can't avoid the others!?

    The major corporations have been engaged in mass tax avoidance for decades.

    Only the little people have been paying their dues.

    S24 is manifestly an unfair tax.

    How can you effectively tax only LL business on debt interest?

    It is bonkers.

    We all know what it was designed to do.

    Fair it certainly  isn't!

    If it was then every sole trader should be taxed on their finance costs...........like that will ever happen! ?

    S24 is a very clever and devious tax and you really have to compliment  the twat who invented it.

    Quite clever really.

    Especially when it isn't even referred  to as a tax................................withdrawal of what the BBC still refuses  to refute are 'generous tax reliefs'

    God how I hate the BBC

    Auntie it ain't. ...............................Dr Jekyll more likely!

    But just to show you how S24 is still being ignored by the PTB I was watching  the Housing debate on Parliament channel in the HoL at 5 this morning...................................as you do!!!?

    Not one mention of why there was a shortage of rental housing caused by S24.

    It is as though there is a collective blindness?

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