Debt and the Taxman
Buy to let property owners may not be able to close the door to debt as the taxman seeks out those who have not paid enough tax on their investment.
Tax can be reclaimed from as far back as six years ago which means that landlords or individuals renting out their homes could face a debt so high, they may have re-mortgage their properties to meet the demands.
Many people already used re-mortgaging as a way to pay outstanding debts, and this move by the taxman could see an increase in people lining up to re-mortgage properties and stay out of debt.
The taxman also has the power to execute penalty charges which could work out more expensive than your unpaid tax bill, as interest charges are added.
Getting complacent with money leads to debt!
He will leave no stone unturned and is also looking for landlords described as ‘ghosts’ who fail to declare that they are renting properties. Information on bogus landlords can be retrieved from banks and even the tenants themselves along with advertisements in the letting section of newspapers. Unregistered landlords can expect fines in the region of £5000.
Anyone who has discrepancies on their tax record will be sent a letter with a leaflet enclosed on rental income and capital gains tax.
Over 80,000 landlords could face a debt to the tune of £48,600 based on housing prices for 2006. However, those who have an interest only buy-to-let mortgage are unlikely to feel the wrath of the tax bill, as they are probably paying the correct amount of tax. Those most at risk are individuals who took out a repayment mortgage for a family property which is now rented out.
Tax can be reclaimed from as far back as six years ago which means that landlords or individuals renting out their homes could face a debt so high, they may have re-mortgage their properties to meet the demands.
Many people already used re-mortgaging as a way to pay outstanding debts, and this move by the taxman could see an increase in people lining up to re-mortgage properties and stay out of debt.
The taxman also has the power to execute penalty charges which could work out more expensive than your unpaid tax bill, as interest charges are added.
Getting complacent with money leads to debt!
He will leave no stone unturned and is also looking for landlords described as ‘ghosts’ who fail to declare that they are renting properties. Information on bogus landlords can be retrieved from banks and even the tenants themselves along with advertisements in the letting section of newspapers. Unregistered landlords can expect fines in the region of £5000.
Anyone who has discrepancies on their tax record will be sent a letter with a leaflet enclosed on rental income and capital gains tax.
Over 80,000 landlords could face a debt to the tune of £48,600 based on housing prices for 2006. However, those who have an interest only buy-to-let mortgage are unlikely to feel the wrath of the tax bill, as they are probably paying the correct amount of tax. Those most at risk are individuals who took out a repayment mortgage for a family property which is now rented out.
posted by teatreebergamot at 7/12/2007 04:57:00 PM
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