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|Government might target limited company buy-to-let|
|Tuesday, 21 March 2017|
Robert Sinclair, Chief Executive of the Association of Mortgage Intermediaries (AMI), said today that the Government might well consider looking at landlord’s use of limited company/SPV corporate vehicles following its recent Budgetary u-turn on raising National Insurance Contributions (NICs) for the self-employed.
Speaking at today’s Financial Services Expo (FSE) Glasgow, the premier exhibition for the financial services industry in Scotland, Sinclair was responding to a broker’s question about the increase in limited company buy-to-let usage and whether the Government would now turn its attentions to this in order to cut down on some of the perceived tax perks which come with this method of owning rental properties.
“If you’d asked me this question three months ago,” said Sinclair, “I would have said it was far less likely to happen. However, given the NICs u-turn, and the £2bn black hole that Treasury have to fill, then it probably makes it more likely.”
Sinclair said a major problem for the Government, and the Treasury “where this sits”, was how they brought this into law. “The big question is, how do you legislate for it?” he asked. “It’s always been possible for a limited company to have a legitimate business expense and to offset it against income, and that’s what we have with limited company buy-to-let. It doesn’t however mean that the Government wouldn’t act on this – my own view is that it’s probably 75/25% against them doing it at this stage.”
Liz Syms of Connect for Intermediaries stressed that buy-to-let advisers must not get involved in providing tax advice to clients, however they should be offering “tax direction” and explaining to the clients what the tax options are now.
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