150% tax for BTL investors?!?!?!?
Discussion
It's they way they have gone about it that pisses off many people.
They justify it as redressing the imbalances in the tax system. Yeah right.
They promised not to increase tax and NI rates during their term if they won the election. They should now be honest and say because of that they need to collect tax elsewhere and, sorry, but you are one of the people getting stuffed.
"First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me."
Pastor Martin Niemöller (1892–1984)
They justify it as redressing the imbalances in the tax system. Yeah right.
They promised not to increase tax and NI rates during their term if they won the election. They should now be honest and say because of that they need to collect tax elsewhere and, sorry, but you are one of the people getting stuffed.
"First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—
Because I was not a Jew.
Then they came for me—and there was no one left to speak for me."
Pastor Martin Niemöller (1892–1984)
jammy_basturd said:
You're annoyed because a political party hasn't kept their election promises and been honest?!
It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and increasing their tax substantially while claiming it makes for a fairer tax system.PurpleMoonlight said:
jammy_basturd said:
You're annoyed because a political party hasn't kept their election promises and been honest?!
It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and increasing their tax substantially while claiming it makes for a fairer tax system.It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and reducing their benefits substantially while claiming it makes for a fairer system.
PurpleMoonlight said:
RYH64E said:
Companies can claim interest on mortgages to buy commercial property as an expense against tax, and I suspect (though haven't seen it in writing) that a Limited Company with a portfolio of mortgaged buy to lets could also still claim interest paid as an expense. It's just private investors that can't, surely that's strange?
A company buying a property to operate from is doing so for the purpose of trade. A personal BTL landlord isn't trading, they are investing for personal gain (yes I accept that some people consider it a business). What other personal investment would receive tax relief on the cost to invest? I can't think of anything off hand.
Its also fist time small investors have been penalised while larger companies in the same industry are not.
GT03ROB said:
and if I change you words a little does it make it better ....
It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and reducing their benefits substantially while claiming it makes for a fairer system.
The dividend tax is additional and not withdrawing any benefit.It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and reducing their benefits substantially while claiming it makes for a fairer system.
GT03ROB said:
PurpleMoonlight said:
jammy_basturd said:
You're annoyed because a political party hasn't kept their election promises and been honest?!
It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and increasing their tax substantially while claiming it makes for a fairer tax system.It's more the sly and underhand way they have gone about it. Picking on relatively small sections of society and reducing their benefits substantially while claiming it makes for a fairer system.
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!The Moose said:
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!plasticpig said:
The Moose said:
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
The Moose said:
plasticpig said:
The Moose said:
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
The Moose said:
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
The trouble is the taxation system primarily deems letting property as investments and not businesses. That is why rental income is declared on a self assessment tax return and not a self employed tax return.And Osborne as decided to attack investment income.....
Rowley Birkin said:
The Moose said:
plasticpig said:
The Moose said:
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
PurpleMoonlight said:
The trouble is the taxation system primarily deems letting property as investments and not businesses. That is why rental income is declared on a self assessment tax return and not a self employed tax return.
Never heard of a self employed tax return...even when I was self employed...or is a whoosh parrot coming my way?!PurpleMoonlight said:
And Osborne as decided to attack investment income.....
Ain't that the truth!The Moose said:
Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
Really? I doesn't require research or monitoring or checking? It doesn't require decisions to buy / sell / change holdings? The Moose said:
First and foremost, owning or running any business of any sort is an investment in one way, shape or form be that time or money so my answer to your question is that it's both a business and an investment.
Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
There are landlords who appoint an agency to do the whole lot for them though. As I understand it the rules for running a BTL through a Ltd. company will not change. I wouldn't fancy running either a tool hire business or a BTL as a sole trader. Why expose yourself to the extra risk?Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
plasticpig said:
There are landlords who appoint an agency to do the whole lot for them though. As I understand it the rules for running a BTL through a Ltd. company will not change. I wouldn't fancy running either a tool hire business or a BTL as a sole trader. Why expose yourself to the extra risk?
Because you won't secure finance as a Ltd company. That is unless the company has enough assets as additional security, such that if the BTLs fold, the sale of the properties plus the other assets will cover the debt, plus costs, with a margin of safety. Or alternatively you'll be asked to provide personal guarantees which removes the benefit of the limited liability in full or part. This is unless the LTV is very low.Our sole trader portfolio was only amassed because we were borrowing as a sole trader. The plus side is we got borrowing even in the depths of the GFC, allowing the acquisition of assets at good prices. The negative has been the risk and now, it would appear, the cockeyed taxation changes shortly to be inflicted.
The Moose said:
plasticpig said:
The Moose said:
Not taxing the interest on a loan for a business is not a benefit!! Interest on borrowings is a cost of doing business and for a fair system to be in place shouldn't be taxed!Spending £250k on shares is most certainly an investment, not running a business. It requires no input from the investor. You pick and choose whatever stock, share or fund you want to stick your money in and then pray to God, Allah, Buddha or some other deity you believe in that it goes up in value.
In a different set of circumstances, spending that mythical £250k in a property is indeed an investment, however renting that property to tenants is (or at least should be) running a business and the initial investment purchasing the asset is a necessary evil of running that business.
Running a BTL portfolio (1 or many) requires more than just sticking a signature at the bottom of a couple of pieces of paper and to be quite honest, if more landlords took their role in the business seriously, perhaps landlords would have less of a bad name...however that's probably a conversation for a whole other thread!
Let me put a slightly different situation to you - I want to start a tool hire business. I take a loan of the same £250k to buy some diggers, dumpers and other power tools such as SDS Drills etc (if I was smart, I'd then take that £250k and use it as the deposit on finance for more machinery, but to keep things simple, let's assume I'm more risk averse than that). These tools are then hired out to customers as and when they want them. The hire company can (and rightly so) offset the interest on the loan as an operating expense. Using the same logic as the change to BTL taxation, the hire company shouldn’t get that relief as Joe Public can’t claim the same tax relief if they buy a SDS drill.
I know someone with properties in the hundreds. For him its a full time job, and a businees that employs other people full time.
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