Autumn Budget 2015

[MatteH Oxford]

They should have made the tax burden on BTLs far more painful.

http://www.property118.com/how-the-budget-will-affect-private-landlords-example/76673/

I suggest that you read the above George. All of the rental income (less expenses) is taxable before any interest is deducted from 2020, a huge change.

It's pretty savage without allowing for any CGT owed to pay, on either new BTL purchases or to cover those gains already recycled into further BTL purchases via equity withdraw for the deposit - that will be the absolute killer if a forced sale is necessary due to substantial losses resulting from running too much leverage on the loans.

A lot of recent landlords did this very thing to keep tax costs down and haven't left themselves enough to cover the CGT on that recycled equity.

 

[The_Abyss]

Isn't the increased stamp duty still an allowable expense for CGT purposes though?

 

[sports_brah]

Business Studies

I mean a history graduate, in addition to pursuing an interest in history is going to become quite adept at researching and critically evaluating sources and will have some skills that could be useful in say equities research in an investment bank, journalism or perhaps training as a solicitor. Likewise a physics graduate in addition to learning about the universe is going to develop some quantitative skills that could be useful in say software development, 3D graphics or pricing complex derivatives for some investment bank.

On the other hand the business studies grad who maybe gets some basic exposure to marketing, learns a bit about accountancy, doesn't really encounter any mathematics above A-Level standard... I'm not sure they develop much from their time - they seem to just learn some 'stuff' at a rather shallow level and the most they can really say about their degree is the sort of thing anyone with no skills can say: I can work in a team, I can meet deadlines... so essentially not much.

I did a business studies degree for my undergraduate (granted an MSc in finance afterwards) and work in one of the top investment banks in the world.

I would say the business studies helped immensely as it helped develop a lot of soft skills as well as giving decent exposure into a number of core topics which I would not have really touched upon as much (strategy, financial accounting etc). This has helped a fair bit along with the usual finance knowledge (derivatives, data analysis etc) as it makes you a more rounded person and I feel has helped me considerably especially in gaining a better holistic business understanding which I feel is needed to get better rather than stay a specialist.

(On phone sorry for mistakes)

 

[MatteH Oxford]

Isn't the increased stamp duty still an allowable expense for CGT purposes though?

I don't have actual the figures to hand; it is yes and I was only reading about it the other day. It doesn't amount to a very big saving at all though iirc.

The fact that a lot of landlords will be pushed into being higher rate tax payers possibly also means that they will pay 28% CGT and not 18% for the lower band. They also only have 30 days from disposal of a sold property now to pay the tax owed from 30th April 2016?

 

[platypus]

They should have made the tax burden on BTLs far more painful.

I tend to agree, but I'd be concerned that we'd just see rents go up to compensate.

 

[platypus]

It's pretty savage without allowing for any CGT owed to pay, on either new BTL purchases or to cover those gains already recycled into further BTL purchases via equity withdraw for the deposit - that will be the absolute killer if a forced sale is necessary due to substantial losses resulting from running too much leverage on the loans.

A lot of recent landlords did this very thing to keep tax costs down and haven't left themselves enough to cover the CGT on that recycled equity.

Are we supposed to feel sorry for them?

 

[Uther]

I think rents will go up anyway.

 

[Freakbro]

Are we supposed to feel sorry for them?

My heart bleeds

 

[platypus]

My heart bleeds

Quite so.

With any luck a lot of them won't be able to afford the CGT and so will have to dump properties on the market.

 

[MichaelAwkward]

Also, isn't attendance at an all time high? Which doesn't seem to suggest taking a loan is a disincentive.

I don't think you should take that as a causative link.

Attendance being at an all time high is more likely a result of societies/parents/students belief that there is no alternative, regardless of the cost (upfront or via loans). This has become a self-fulfilling prophecy supported by successive governments.

Have to remember also that attendance figures include international students, so any increase potentially masks decreases in attendance by marginalised groups - think I remember reading that poor white English students attendance has decreased recently.