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Tax changes will not be detrimental to landlords-NLA
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The National Landlords Association has moved to issue a report in an attempt to calm fears relating to late tax additions to the Finance Bill at Committee Stage.
There is growing concern that these amendments regarding land and capital tax will have yet another negative impact on buy-to-let landlords.
Impact
Earlier this week, The Law Society suggested that profits generated from the sale of buy-to-let property could be subject to income tax instead of capital gains tax as a result of the changes.
However, the National Landlords Association believes that the planned alterations to the Bill will not have a detrimental effect. The Association points to the fact that these measures, ‘were part of the anti-avoidance measures promised in the Budget.’[1]
New clauses to be added to the Finance Bill will involve legislation announced in the 2016 Budget. This will include a specific alteration to income or corporation tax on profits generated from the disposal of land in the UK.
These clauses will make sure that offshore structures cannot be utilised to avoid UK tax on profits made from dealing in or developing land in Britain.
Tax changes will not be detrimental to landlords-NLA
Ambiguous
Despite the rather ambiguous wording, the National Landlords Association said it is, ‘reassured by the then Chief Secretary to the Treasury’s explanation of the new clauses in July.’ This includes a comment which reads: ‘this measure is targeted at those who have a property building trade; it does not impact the tax profile for investors in UK property.’[1]
With the Report Stage for the Bill coming up next week, the National Landlords Association has confirmed with HMRC officials responsible that these changes are not intended to alter existing tax arrangements between buy-to-let landlords and HMRC.
The NLA said in a statement, ‘HMRC considers that generally property investors that buy properties to let out to generate property income and some years later sell the properties will be subject to capital gains on their disposals rather than being charged to income on the disposal.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/tax-amendments-will-not-adversely-affect-landlords
