UK Landlord Forum / Life

Some of you may or may not have heard...

Landlords have banded together and started a e-petition against the decision to change the rules relating to mortgage interest relief, which was proposed by George Osborne in the budget last month, 8th July 2015.

Essentially, Landlords are currently able to offset all their mortgage interest payments against their rental income, before calculating their rent profits and therefore their tax bill. This is quite normal in business as the general taxation principle is that tax is applied on profit. However, the new proposals break the normal taxation practice and require landlords to pay tax on part of their costs (the interest).

This is a big change because in most cases, interest payments will be the landlord's largest cost. No other business is taxed in this way. No other business is taxed on interest on loans taken out to buy assets that generate taxable income. For more information, go here.

The measure will be introduced gradually from 6 April 2017 and is 'tapered' over 4 years. By 2021, the full impact of the change will bite. Although the implementation of the proposal is to be phased, it is already causing uncertainty for landlords and tenants.

Not all landlords will be effected, it depends on the tax bracket. However, it seems unfair either way.

SIGN PETITION HERE - nearly 5,000 signatures. If this reaches 10,000, Government will respond and at 100,000 it will be considered for debate in Parliament!

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