Landlords to mount legal challenge over Buy to Let tax changes
Two Buy to Let landlords have raised more than £50,000 in a bid to hold a judicial review over Buy to Let tax changes.
Private Landlords Chris Cooper and Steve Bolton launched a crowdfunding drive on 26th December and have so far raised £50,041. This Monday they announced they had sent a legal briefing document to their law firm.
The pair hope to secure a judicial review of specific clauses of the Finance Act 2015, through which the Government installed changes which prevent landlords from being able to offset mortgage interest costs against rental profits before tax is calculated.
They argue that: “compelling evidence points to the consequences of this absurd new tax having a devastating impact on the UK housing market; increasing rents for tenants and the housing market potentially being flooded with properties for sale. And that’s not to mention the loss of jobs and damaging impact that falling house prices can have on the economy.
“The Finance Act 2015 includes Clause 24, which overturns a fundamental financial business principle, where income minus costs equals profit.
“The Government wishes to continue to tax not just the rental ‘profits’, but will now not allow individual investors to offset the main cost of arriving at that taxable profit, namely the mortgage finance costs.
“There was no prior consultation with relevant individuals or organisations prior to the budget announcement. Subsequent communications regarding grave concerns from many people since introduction of the Finance Act 2015 have had no impact.
“There was certainly no mention of this tax grab in the run up to the election and some media reports suggest that a huge number of conservative voters will feel betrayed once they start to feel the impact of Clause 24.”
Chris Cooper and Steve Bolton hope to send a pre-action protocol letter by the end of the month with the Government then having 21 days to respond.