More than 600 Landlords have raised £42,000 to support judicial review
The property investors mounting a legal challenge to the Government’s proposals, increasing tax on buy-to-let investments, have risen over £42,000 in just six days.
The tax changes, which will apply to existing investment properties and future purchases, will result in some investors paying tax even where they generate no profit or are making loss.
This chimes with research this week claiming almost half of landlords plan to raise their rents in 2016, and almost one in five are planning increases of more than 3pc, according to SpareRoom.co.uk.
Landlords hope a judicial review will overturn the controversial “Clause 24” of the 2015 Finance Bill, in which the Government introduced plans to prevent landlords offsetting mortgage interest costs against rental profits before calculating tax.
The judicial review – a legal process in which a court reviews legislation or administrative decisions – needs to be submitted by February 17, 2016.
Private landlords Chris Cooper and Steve Bolton are leading the challenge. They set up a crowd-funding page via website Crowd Justice on Boxing Day and have already almost met their £50,000 target. More than 600 people have so far contributed money to the challenge.
The challenge will be based on the argument that the Tory’s tax move flouts “a long-established principle of taxation that expenses incurred wholly and exclusively for the purposes of the business is deductible when calculating the taxable profits”.
Buy-to-let investors have met with little support from any political party, but their objections to the tax changes are widely supported by the accounting and legal professions.
The Institute of Chartered Accountants in England & Wales has attacked the removal of mortgage interest relief as “unreasonable, unworkable and unthought through”, and warned that rents would rise.
Source: New feed