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  • Tax

    Tax reform could hit incorporated landlords

    'it was clearly aimed at the large leveraged landlords that the BoE thought were a potential threat to the banks., If a level playing field had been his true aim he would have abolished all mortgage relief. It seems obvious to me that it wasn't'

    I find this very interesting.

    I still believe that they were reacting to Carney's panic over the levels of unregulated lending going on in the BTL sector. Incidentally, I also believe that if some of the BTL lenders hadn't been so greedy with their obscene margins-over-base it might never have been flagged-up.

    I'm nowhere near as clever as many contributors PT, so my theorys might be a bit simplistic, but I see the whole dash to incorporate as totally unnatural for most landlords - and so might the government - so, in effect, it was just simply taking advantage of a tax loophole. I hope I'm wrong, but my gut feeling is that HMRC will see incorporation for small landlords purely as a tax-saving exersize and jump on it.

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    You are spot on it is a loophole


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    Learn Change and Adapt ?????

    It isn't really. Certainly it is much less of a loophole than remortgaging to extract money to live on tax free.

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    I hope you are right and I am wrong Peter

    Labour has already said Corporation Tax will rise and that's a fact

    so Ltd Co Landlords will still pay more double taxation

    The public perception of our sector stinks and the MP will change the Taxation of Co Landlords

    which ever way it goes Tory or Labour we will all pay more one way or another



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    Learn Change and Adapt ?????


    Ok my response to the above is this

    Osborne used S24 to stop Landlords high leveraging for the reasons you have out lined

    So Landlords like myself set up a company and still borrow just in the same was as we did before

    What is the difference ??? apart from a Company Wrapper

    Large Landlords in a Company can still leverage up Peter

    so putting two and two together it looks quite simple to me Not Imagination that the Govt will plug this Loophole

    They have only done half  job at present ??????




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    Learn Change and Adapt ?????

    The borrowing isn't quite the same but you are right S24 was only half. PRA was the other half.

    Maybe they will need more for companies, but if the rate of BTL growth has slowed then their aim has already been achieved.

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    DL, could you please bear in mind that newby and relatively inexperienced landlords read these posts avidly in order to learn about the industry. We have a responsibility, therefore, to be accurate, factual and truthful in our posts. Personal opinion features large, of course it does, but when your strong opinions are apparently backed up with what purport to be facts then there should be a degree of knowledge or research to back them up. You can't simply throw out figures which frankly on occasion you obviously just make up to suit whatever particular doomsday topic you are pontificating on at the time.

    Your statement in this thread that taxation from companies would add up to 70% is a classic case in point. You clearly do not understand how corporation, income and dividend taxes inter-relate, and have been duly corrected above. Please don't make outrageous claims when you don't actually know what you are talking about. Many people on this forum look up to and respect you and therefore are more than likely going to take what you say as gospel, so it's important that you don't mislead.

    When you ARE caught out you do I'm afraid have a habit of brushing aside any correction of facts which you previously used to demonstrate your point, with words to the effect of "well, never mind, I still think blah, blah, blah" even though you no longer have any credible evidence. Facts are relegated to opinions very quickly.

    This whole thread is somewhat misleading. These are suggestions which have been kicked around the table for some time, and have nothing whatsoever to do with property owners specifically, as has already been pointed out above. Equalisation of taxation whichever method of business structure is used would be a very positive innovation. A least we would all be able to better understand it and therefore avoid massive misconceptions being spread on internet fora.

    Cheers,

    John

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    I know I am alone in general with my views on PT

    I say thing other Investors don't want to hear ??

    My views are given from the position the Govt don't want you or I to invest in the PRS

    If a New Landlord reads my views and just thinks about them I will be happy

    BTL could become a Toxic Investment the dangers are building now and I am quite sure IF I had said in say 2013 that Mortgage Tax relief you would have

    said Don't be stupid its just your imagination and a fantasy

    You and I hold assets the Govt would prefer us not to hold If I was wrong on this why did we have S24 and why did they increase Stamp Duty

    If you can show me evidence that the Govt wants to stop BTL I will listen

    If Labour comes to power You will say Dear Old DL was right

    Think about what we have lost to date


    But If you are happy just to see Blue Sky Good on you and I wish you luck


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    Learn Change and Adapt ?????


    The evidence is that this government has no problem with small lor unleveraged andlords.  S24 excludes the ones who remain basic rate taxpayers and PRA has less effect on those with 3 or fewer mortgages. It is only large leverage landlords they don't like.

    I agree Labour would be much worse.  I don't think it is that likely they will get power. Mostly because I can't see them becoming the majority party in Scotland again for a long time. If they managed to for a coalition with the SNP then EVEL would make it difficult for them to impose their policies on England regarding devolved matters like housing.

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    Do they like Company Landlords ??


    my own view we are an evil they have to work with for now and that goes for every govt  that comes our way

    I don't think they have any intention of encouraging BTL be it small or Large

    If the Tories win next time they will side with the Consumer ie Tenant and ask for rent control and longer tenancy's and in return we may see some sort of sweetener

    If Labour come to power they will give this sector no mercy

    They will highly borrow build council houses and bring in rent control and much higher taxation and Regulation

    I am planning now for my own DL Exit  If Labour come I will leave If Tories arrive again I will think about leaving

    The main issue is we will not be in for an easy ride with either party

    we are on a short fuse 5 years maybe before we will see what govt has for us all


     

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    Learn Change and Adapt ?????