Cherie Blairs challenge to buy to let tax court date set

The law, which was announced in last summer’s Budget, will be gradually phased in from next year.

A court date has been set for a legal challenge to tax changes set to hit landlords from April next year. Cherie Booth QC, wife of Tony Blair, is acting for buy-to-let landlords in their bid for a judicial review into the new law, which removes landlords’ ability to deduct their mortgage interest costs from their rental income before calculating their tax bill.

The law, which was announced in last summer’s Budget, will be gradually phased in from next year.

Landlords will be able to claim an allowance, but it will be limited to 20pc – meaning higher and additional-rate taxpaying landlords will end up paying tax on their turnover, not their profit.

Basic-rate taxpayers could be pushed into higher tax brackets without earning any extra income.

The case will now be heard on October 6 at the Royal Courts of Justice in London.

The hearing will be a “permission hearing”, at which the group will set out its argument for bringing a judicial review.

The hearing is expected to take about 90 minutes, during which a judge will decide whether or not the group is allowed to bring a judicial review to challenge the law.

Landlords Steve Bolton and Chris Cooper are behind the campaign, which has raised more than £100,000 to fund the challenge.

The campaigners say they are concerned that the tax will push rents up and force many landlords to sell.

The case will partly be based on the argument that the new rules go against a a European law which stops Governments from favouring one type of landlords over another, as the new tax regimes will only affect people who own properties in their own name, as opposed to through companies.

Mr Bolton said that Brexit will not affect the case as the tax – which was part of last year’s finance bill – was brought into law in October last year.

He said he was “confident” of success at the hearing, and said: “The reason we’re calling our campaign Axe the Tenant Tax is that ultimately it’s going to affect tenants, because rents are going to increase.”

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Written by: Houseladder