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Changes to Landlord taxation relief – we need your help!

RLA
Written by RLA

In the wake of the Summer Budget where the Chancellor announced serious tax changes for Landlords, the RLA has met with George Osborne directly and with officials from the Treasury and HMRC. Although we have been told there will be no U turn on changes to Mortgage Interest Relief proposals we have been asked to propose other ‘tax solutions’ to the Treasury and will be doing so in the near future. If you have alternative ideas on tax relief then please let us hear them!

In the wake of the Summer Budget where the Chancellor announced serious tax changes for Landlords, the RLA has met with George Osborne directly and with officials from the Treasury and HMRC.  Although we have been told there will be no U turn on changes to Mortgage Interest Relief proposals we have been asked to propose other ‘tax solutions’ to the Treasury and will be doing so in the near future.  If you have alternative ideas on tax relief then please let us hear them! 

We are sure it hasn’t escaped your attention but back in the Summer Budget the Chancellor announced a raid on tax relief for landlords’ finance charges.  Between April 2017 and April 2020 restrictions on Mortgage Interest Relief will be phased in, limiting relief to the basic rate of tax.

Although you can use the RLA tax calculator to see how this impacts you, typically a landlord with £150,000 buy-to-let mortgage on a property worth £200,000 could see his or her profit fall from around £2,160 to just £960 a year.
Over the past month the RLA has met with the Chancellor, George Osborne, directly and with officials from the Treasury and HMRC.  While we have been told that “there will be no U-turn on this” it shouldn’t stop us from trying.

We have, however, been asked to propose other ‘tax solutions’ to the Treasury and will be doing so in the near future. 

If you have alternative ideas on tax reliefs then we would be happy to hear them, particularly if you can provide reasons other than just ‘it will save the landlord money’.   For instance, allowing energy efficiency improvements to be written off against income as opposed to capital improvement will encourage landlords to invest in energy efficient measures.  Please email your ideas to campaigns@rla.org.uk

In the meantime a petition has been set up calling for the reversal of the planned tax relief restriction on ‘individual’ landlords.  The petition already has 14,000 signatures which means that the Government will formally respond. If we can reach 100,000 signatures it will be considered for a debate in Parliament. Although we may be a long way off 100,000 yet, each signature counts. The RLA also have a dedicated Tax Campaign webpage where you can write to your MP

The RLA will continue to work hard to deliver the best deal possible for landlords and the whole of the private rented sector and your continued support is appreciated in what is an increasingly challenging climate.

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About the author

RLA

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

3 Comments

  • The proposed policy is complicated, unreasonable and in some cases, not possible to collect (blood out of a stone scenario). In my view any policy should be simpler rather than more complicated, and it should be based on affordability rather than how easy it is for the government to collect (not that their suggested policy ticks that box!)
    Here’s my idea – leave the interest/capital loan repayment allowance as it is now; and in order to collect more revenue, scrap the personal capital gains allowance. This way it simplifies the current Capital Gains Tax policy, and it would be affordable as it collects tax from the person when he is actually in possession of the cash.
    I also believe that in the interests of fairness, a capital gains inflationary allowance should be allowable against the gain and then the net gain should be taxed at the higher rate (40%). Alternatively, and even simpler, treat the whole of the gain as personal UK income and tax it accordingly.
    I have other ideas for limited companies however I understand that this isn’t the issue, yet!

  • I have not fully investigated the latest Tax changes, but I have another area which I feel needs addressing
    I am a “small buy to let Landlord with a dozen properties . Those properties are near to being paid off , and I have been lucky with the low interest rates . My gripe is that I would like to sell some of these houses and move upmarket to more expensive properties , but as I understand the position I have to pay Capital Gains tax on these properties before I purchase more . I would like to be able to Roll Over the proceeds into more expensive properties and pay the CGT at some date in the future !! This could be presented as allowing less expensive properties for first time buyers onto the housing ladder and create some movement in the market higher up the chain !
    Yours sincerely Rodney Hamer

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