Budget 2012 could put some buy to let landlords out of business

31 March 2012 Categories: News

Budget 2012 could put some buy to let landlords out of business

The 2012 budget wasn’t exactly kind to anyone but for some buy to let landlords it spells devastation. This is because according to new rules they could be forced to pay 24 months’ worth of tax liabilities over the next six months.

The way in which the new tax rules work is as always quite complex and the details can be found on the HMRC website. In simple terms though it seems that many buy to let landlords profited on their investments during the tax year that ended in April 2011; due to the fact that the interest rates they were paying previously were lowered because of the recession.

The tax for the 2010/2011 year became due on 31st January 2012 however because of the new rules all buy to let landlords would also have become liable for half of their estimate tax liability for the current year (2011/2012). The remaining half is due on 31st July 2012.

Although very confusing these new rules mean two years’ worth of tax is expected from buy to let landlords before the end of July this year – a demand that could force a lot of portfolio holders to sell properties just to pay their tax bills.