Landlords lose High Court buy-to-let tax challenge

Flat-pack houseA landlords’ group represented by Cherie Booth QC has lost its High Court bid for a judicial review of forthcoming planned tax changes affecting buy-to-let properties.

Booth, the wife of former Prime Minister Tony Blair, acted for landlords Steve Bolton and Chris Cooper, who brought the case on behalf of the Axe the Tenant Tax group, which says it represents over 150,000 landlords. The group claims the changes will discriminate against private individual landlords and will effectively amount to a tax on tenants whose rents are likely to be raised to cover the extra tax costs.

Under the changes, to be phased in over four years from April 2017, the amount of tax relief that buy-to-let landlords can claim through ‘allowable expenses’ (most notably in respect of mortgage interest payments) will be cut to the base rate of tax (currently 20 per cent) for everyone. This will have significant financial implications for higher and additional-rate taxpaying landlords, who can currently claim tax relief at the full rate, which for them is presently 40 and 45 per cent respectively.

Companies that own buy-to-let properties, individuals wealthy enough to own buy-to-lets without mortgages and landlords of holiday lets will be largely unaffected by the new rules.

Legal advice on commercial property disputes

For expert advice on any commercial property dispute matter please contact Daniela Catuara at daniela.catuara@gabyhardwicke.co.uk or 01323 435 900.

For guidance on tax matters please ensure expert accountancy advice is taken.

Posted: 25 October 2016

More news