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TODAY'S OTHER NEWS

Government to be challenged in court today over BTL tax grab

Landlords fighting to prevent punitive tax relief changes for buy-to-let income being introduced in April 2017 are ‘hopeful’ that a hearing to be held today will see them awarded the right to have their full case heard in court.

The campaign group Axe the Tenant Tax, led by private landlords, Chris Cooper and Steve Bolton, have been seeking a judicial review over the government’s changes to tax relief ever since the government announced its contentious decision to remove finance costs for individual landlords.

The landlords used a crowdfunding platform to raise around £180,000 to fund their legal campaign.

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The existing rules that permit landlords to offset all of their mortgage interest against tax will, from next year, be phased out, and by April 2020, once they have been withdrawn altogether, it is likely that higher-rate tax payers will only receive 50% of the relief that they currently get.

According to Treasury forecasts, the tax relief changes will net it close to £1bn a year by 2021. But the curb on the amount of tax that landlords can claim back on their property investments, which was announced by former chancellor George Osborne in the Budget last summer, could mean buying and renting out property is no longer viable for many buy-to-let landlords.

Cooper and Bolton, represented by Cherie Blair QC (right), argue that attempts to reclassify mortgage interest as anything other than a normal business expense could have a disastrous impact on the buy-to-let sector, with higher expenses passed on to tenants. 

Bolton said: “After months of campaigning, we will find if we have won the right to have a judicial review. We believe this tax change will distort competition whereas HMRC believes individuals and companies are treated differently from a tax perspective and so you can cannot compare the two.”

“We are hopeful and expectant the judge will grant us permission for a full judicial review,” he added.

Today’s hearing will take place at the Royal Courts of Justice. 

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  •  G romit

    Theresa May in her conference speech yesterday said her Government would fight injustice. Well here's her first test is she going to defend Sec.24 or do the right thing correct this injustice and repeal it?

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    She should also remove the stamo duty too

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    • 06 October 2016 18:07 PM

    Yes, if the judicial system is healthy.

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    • 13 October 2016 09:55 AM

    As a landlord, using reputable agencies, our rents are absolutely going to rocket. I have not spent my life building up a property business (in which private tenants are being very well looked after) to just sell up because of illogical government tax strategies. That is not going to happen. So the only option to keep the show on the road is to start cranking the rents, to fund the new taxes. It's a chain reaction situation. If tenants think rents are already high, they have hell coming their way. I think it's an outrageous attack by government. I may have to ask for more people into the smaller properties but I have no choice. My financial modelling suggests rents to rise by 50% to cover off the tax grab. So if I were a tenant ? I'd be complaining to the government and my local MP. They are going to end up ravaging through the tenants' pockets. And for what goal? I have loads of tenants who only want to rent, and the last thing on their mind is having a mortgage. Is the government going to stop people renting cars next?

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