"Offered no respite in the Budget, landlords are facing a bleak future and a conundrum over how to manage their properties.
Existing landlords are caught between an income tax bill which is set to begin rising next year, or the stamp duty hit involved in incorporating their properties now.
Shirleyann Haig, who owns 17 properties in Liverpool, is in this situation. She and her husband Matt are facing long-term financial ruin if they don't incorporate - or a big tax hit now if they do.
There are three main tax policies that are likely to affect landlords' profitability - all of which are making the future look bleak for the Haigs.
First, in an unexpected move, the Chancellor, George Osborne, excluded them from a drop in capital gains tax for both higher and basic-rate taxpayers.
He also confirmed that a 3pc surcharge in stamp duty will go ahead from April 1, as planned in consultation, and scrapped a planned stamp duty exemption for larger landlords, meaning those with more than 15 properties already will also have to pay the extra tax.
...
Now assume the same investor buys via a company. The problem is that the mortgage rates are higher at 4.5pc, so his post-tax income drops immediately to £60,496.
...
What about properties you already own?
For landlords who already own multiple properties, the benefits of incorporating – such as they are – are difficult to capture.
That is because capital gains tax may apply when properties are sold by the individual, and stamp duty when they are repurchased by his company.
.......
The changes will mean that both become higher-rate taxpayers, and their tax bill is set to rocket. But if she wanted to incorporate the business, the bill would be around £100,000 in stamp duty and set-up costs.
......
Mrs Haig said: “I thought I was helping people with this business, but I’ve ruined my own life by taking a decision which I thought would be good. And then the Government decided landlords were the devil.”
...
"
More from the source: ‘Our 17 properties will lose £16,000 per year’
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So essentially Gidiot trapped people - if he was fair he'd at least should have allowed to incorporate those properties with 0 stamp duty and no CGT - during transitional period of a few years at the very least.
Existing landlords are caught between an income tax bill which is set to begin rising next year, or the stamp duty hit involved in incorporating their properties now.
Shirleyann Haig, who owns 17 properties in Liverpool, is in this situation. She and her husband Matt are facing long-term financial ruin if they don't incorporate - or a big tax hit now if they do.
There are three main tax policies that are likely to affect landlords' profitability - all of which are making the future look bleak for the Haigs.
First, in an unexpected move, the Chancellor, George Osborne, excluded them from a drop in capital gains tax for both higher and basic-rate taxpayers.
He also confirmed that a 3pc surcharge in stamp duty will go ahead from April 1, as planned in consultation, and scrapped a planned stamp duty exemption for larger landlords, meaning those with more than 15 properties already will also have to pay the extra tax.
...
Now assume the same investor buys via a company. The problem is that the mortgage rates are higher at 4.5pc, so his post-tax income drops immediately to £60,496.
...
What about properties you already own?
For landlords who already own multiple properties, the benefits of incorporating – such as they are – are difficult to capture.
That is because capital gains tax may apply when properties are sold by the individual, and stamp duty when they are repurchased by his company.
.......
The changes will mean that both become higher-rate taxpayers, and their tax bill is set to rocket. But if she wanted to incorporate the business, the bill would be around £100,000 in stamp duty and set-up costs.
......
Mrs Haig said: “I thought I was helping people with this business, but I’ve ruined my own life by taking a decision which I thought would be good. And then the Government decided landlords were the devil.”
...
"
More from the source: ‘Our 17 properties will lose £16,000 per year’
--------
So essentially Gidiot trapped people - if he was fair he'd at least should have allowed to incorporate those properties with 0 stamp duty and no CGT - during transitional period of a few years at the very least.
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