Landlords hit back on new buy-to-let proposals
08 February 2016
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, please contact us by email or by phoning 0141 221 2984.