Another thread on BTL

Thrugelmir

Steve Bolton, whose buy-to-let business has a £200m nationwide residential portfolio,

Seems as if he doesn't want to put his in his pocket though. Using crowd funding to raise funds to bring a case. All of which suggests that doesn't appear that confident of winning.

CLAPTON

chucknorris wrote: »

Bit more detail:

Landlords will be able to obtain relief as follows:

in 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
in 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
in 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
from 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

as I understand it, is that the 'tax reduction' is a tax credit and not a lower tax charge
this might seem to be the same thing but the effect can be to push some-one into being a 40% tax payer who would not otherwise be so.

CLAPTON

Thrugelmir wrote: »

Seems as if he doesn't want to put his in his pocket though. Using crowd funding to raise funds to bring a case. All of which suggests that doesn't appear that confident of winning.

possibly so; but unless one was absolutely certain of success, why wouldn't one want to share the risk/cost?

chucknorris

CLAPTON wrote: »

as I understand it, is that the 'tax reduction' is a tax credit and not a lower tax charge
this might seem to be the same thing but the effect can be to push some-one into being a 40% tax payer who would not otherwise be so.

I did hear something like that, but to be honest, with me being a 40% tax payer, I didn't make any effort to confirm what the situation was.

Thrugelmir

CLAPTON wrote: »

possibly so; but unless one was absolutely certain of success, why wouldn't one want to share the risk/cost?

Be surprised if the money was raised. The article is most likely a promotional fishing trip

kinger101

CLAPTON wrote: »

the exiting system is that you are taxed on the profit which is

rental income less
-mortgage interest
-less wear and tear (if furnished)
-less other costs (advertising, safety checks repairs)

the new system will be
taxed on
rental income less
-wear&tear (if furnished by actual spend)
-less other costs

plus a tax credit at basic rate if your total income based on the new 'profit' defintion is less than 40% tax level

so neither a turnover tax nor income only either

A tax on money received by a business, but not retained as profit, is effectively a turnover tax. It certainly isn't the historical basis of income taxation.