BTL landlords threaten court action over tax changes

Ryan Bembridge

February 1, 2016

Two buy-to-let landlords including Platinum Property Partners founder Steve Bolton are threatening court action against the government for the proposed tax changes.

Bolton has labelled the changes “unfair, undemocratic and underhanded”, which will see the amount of higher rate tax relief landlords can claim back cut from 45% in 2017 to 20% in 2020.

Bolton and his associate Chris Cooper have contacted law firm Omnia Strategy, led Cherie Blair, the wife of ex-Prime Minister Tony Blair, which said the campaign has a ‘reasonable chance of success’.

The legal team has now issued a Pre-Action Protocol Letter to HMRC which the government must respond to by letter by 10 February.

The landlords have crowdfunded £50,000 from 737 supporters via the Crowd Justice website to fight the tax changes which they have called the ‘Alice in Wonderland’ tax.

Bolton said: “This tax grab is unfair, undemocratic and underhanded, and we believe it is unlawful on a number of points. In no other business are costs wholly incurred to fund the business liable for taxation.

“In addition there is no substantiation in the government’s proposal that the changes will create a level playing field between homeowners and buy-to-let landlords.

“The change discriminates against the typically smaller landlord who may incur effective tax rates of over 100% while making an economic loss, and gives an unfair commercial advantage to many other categories of landlord unaffected by the change.

“We are therefore delighted that our legal challenge has progressed to the next stage and look forward to receiving the government’s response.”

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