Landlords hit back on new buy-to-let proposals
Following the government’s proposals to increase tax on buy-to-let properties, investors have challenged these measures and have raised their funding target of £50,000 for a judicial review in just one week.
The buy-to-let (BTL) changes could mean that
some investors may have to pay tax even when they generate no profit or are making a loss. Landlords are launching a judicial review which they hope will overturn ‘Clause 24’ of the 2015 Finance Bill, in which the government introduced plans to prevent landlords offsetting mortgage interest costs against rental profits before calculating tax.
The argument is that the tax move disregards the long-established principle of taxation that ‘expenses incurred wholly and exclusively for the purposes of the business, are deductible when calculating the taxable profits’. Under the new rules,
from 2020, for higher-rate taxpayers, mortgage costs above the 57% of rental income will render their BTL investments loss-making.
If you are likely to be affected by these changes to BTL, then please get in touch. We are here to help.
T: 020 7376 9333
E: info@figurit.com
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