New government policy: Will buy-to-let investors lose out?

hallmark

Bizarre thread this has turned into.

Chucky is lying & Doctor Gloom's quote in post #6 is entirely accurate.

MSE have the capability of proving this if they so desire.

StevieJ

chucky wrote: »

seeing that the topic of this thread was being purposely diverted by the usual frothers on this forum...

below is the original post with some good money saving advice in typical MSE style for a landlord looking to me more tax efficient...

A good job we have a new govt and this is proposed legislation

Instead, ‘deliberate wrongdoing’ is defined as an act capable of causing a ‘loss of tax.’ This in turn is defined as ‘relief, reduction, repayment or credit of any kind.’ These definitions mean that any advice on saving tax could be subject to a penalty. :eek:

I can see it now Martin Lewis being marched to the high court

http://www.bigbrotherwatch.org.uk/home/2010/05/fined-for-talking-about-tax.html

chucky

StevieJ wrote: »

A good job we have a new govt and this is proposed legislation

nice one Stevie...

here's a bit more info on the PPR issue where they recommend you should live in the 2nd property for a few months to avoid the CGT tax hit and what you would need to do...

But, before you move into your second property, remember that you must live in the property for at least a few months. You must have occupied the property properly as a family home and will need proof of residence, such as bank statements, postal details and electoral details which are all registered to the new address.

http://www.lawpack.co.uk/Knowledge/Property/BuyingAndSelling/article885.asp

this was interesting - looks very helpful. i may start a thread on this as it's very MSE

5. Get letting relief on your main residence.

If you move into your second property and let out your first home, you can be entitled to "private letting relief". You can exempt up to £40,000 of the gain accrued during the period that the property was let out as private residential accommodation.

Anyone who has a share in the property can claim it, so if the property is in joint names, you can claim £80,000 between you. With the main residence exemption and private letting relief, your overall capital gains tax bill can be reduced dramatically

StevieJ

chucky wrote: »

nice one Stevie...

here's a bit more info on the PPR issue where they recommend you should live in the 2nd property for a few months to avoid the CGT tax hit and what you would need to do...

http://www.lawpack.co.uk/Knowledge/Property/BuyingAndSelling/article885.asp

this was interesting - looks very helpful. i may start a thread on this as it's very MSE

I suppose 5 will cover accidental landlords?

LydiaJ

This is very weird.

As I think I've mentioned before, I live in one of the constituencies that was classified as super-marginal for this election, and so received a staggering quantity of election literature. One day, I got a Tory manifesto promising, among other things, to keep IRs low in order to keep HPs up. Since I'm a potential cash FTB, that wasn't looking promising for me. Shortly afterwards, I got a letter from Osborne - addressed to me by name at my address, but beginning "Dear Elector". He said that Cameron had asked him to be chancellor in the event of a Conservative government, and he wanted to know what people thought about the economy. Fresh from a long discussion on here, I filled in the form with lots of stuff. In particular, I said that if they wanted to help FTBs they should stop propping up insane HPs with pointless SO schemes and actually increase the supply of houses available for FTBs to buy by (a) building more houses and (b) redressing the tax advantages towards owner occupiers and away from BTL investors.

I stuck it in the envelope, posted it and forgot about it. In my wildest dreams I cherished a faint hope that if enough people replied along similar lines it just might challenge the assumption that the entire population regard high HPs with the same unalloyed joy that the media do, but I felt certain that the powers that be would continue to regard those who would like to buy but are priced out as a fringe group whose misfortunes may be regrettable but are not worth doing anything about.

But here we are. If this article is to be believed, they are suggesting changing the tax rules to get more tax out of the BTL brigade by a policy that (on its own) won't be detrimental to FTBs and other OOs. I'm stunned.

Thrugelmir

chucky wrote: »

lol - here's a tip for any BTLer out there.

the other option that you have is run the BTL properties out of a Ltd Co - CGT is much lower there. you're also able to avoid paying large amounts of income tax and national insurance by paying yourself dividends instead.

there's always a way around all of these little changes in the law

Property trading by a Limited Company is subject to Corporation Tax not CGT. So gains are actually taxed at a rate no lower than 3% higher than current rates of CGT, and there is no annual exemption that an individual is able to claim.

So the wrapper for individuals to shelter in a Limited Company is a little more complex than it seems.

Doctor_Gloom

hallmark wrote: »

Chucky is lying & Doctor Gloom's quote in post #6 is entirely accurate.

MSE have the capability of proving this if they so desire.

There we have it then. chucky has been conclusively exposed as being not only an advocate (or perpetrator) of fraud but a liar as well. And still no apology or retraction has been forthcoming.

Emy1501

Its difficult to say really. If the increase is going to come in at the time of the budget then I cant see a rush to sell now as few will beable to complete within 50 days. As already said many BTL investors buy for long term gains.

I suspect it may effect those flipping and buying to make money from Capital Gains etc. Therefore maybe be less buyers coming into the market but can't see a rush of sales.

mbga9pgf

Cute_Mouse wrote: »

This does not make sence to me. There is suppose to be a shortage of homes, so why make it more difficult for landlords to buy and sell buy to lets. I understand about the second home being used as a retreat (so I am not talk about that).

There wouldn't be a shortage without greedy btl'ers. A lot of those that are forced to rent would be able to afford. Looks like the greedy btl brigade are going to start having to pay tax like the rest of us, and if it's not an affordable business, well, then they need to sell! Ha ha ha

Harry_Powell

Another carolt thread descends into an argument. Oh, hold on, that was the whole point of the thread in the first place. Silly me.