Landlords are joining forces to fight the new Tory tax hike with the help of Cherie Blairs law firm
The Government’s proposals to increase tax on buy-to-let investments by preventing landlords offsetting mortgage costs against profits is being challenged in court.
The controversial “Clause 24” of the 2015 Finance Bill will effect both new investments and current investments for landlords even if there is a loss.
The challenge is being led by millionaire private landlords Steve Bolton and Mark Alexander. They have appointed law firm Omnia Strategy, founded and chaired by Cherie Blair QC, the wife of Tony Blair.
Mrs Blair, along with her husband and former Prime Minister Tony Blair are said to own a real estate portfolio worth £30million. They also own buy-to-let flats in Bristol and Manchester.
Landlords will argue 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 are deductible when calculating the taxable profits”.
Although buy-to-let investors have met with little support from any political party, their objections to the tax changes are widely supported by the accounting and legal professions.
The Institute of Chartered Accountants in England & Wales (ICAEW) has attacked the removal of mortgage interest relief as “unreasonable, unworkable and unthought through”.
If Clause 24 goes through tenants will be hit with higher rents to cover the costs.
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