Please Note: This Article is 6 years old. This increases the likelihood that some or all of it's content is now outdated.

BREAKING – Big disappointment for landlords as court rejects full judicial review of BTL tax.

Landlords represented by Cherie Blair QC have lost a legal fight to overturn legislation designed to increase the tax landlords pay on their buy-to-let earnings.

A judge, Mr Justice Dingemans, at the Royal Courts of Justice yesterday rejected a landlords’ crowd-funded group’s application for a judicial review of the Treasury’s tax legislation, which would phase-out over a period of four years landlords’ ability to claim mortgage interest as a business expense.

Campaigning landlords Chris Cooper and Steve Bolton brought together a group of landlords like minded landlords under the group’s fighting name of “Axe the Tenant Tax”, believing that removing business interest relief for just one group, landlords, was an injustice and needed to be challenged.

However, the judge thought otherwise, that the claim was not justified and said: “It would be a miserable spectacle to watch a case that is bound to fail.”

Speaking after the hearing, Mrs Blair had said:

“The Court’s decision that our clients’ legal challenge should not proceed is very disappointing. Steve and Chris, and many others, have dedicated a lot of time and energy into putting forward the best case possible. We know the case has been supported and followed with interest by a large number of individual landlords. Many of these landlords now face challenging times ahead.

“From the outset, the legal process was just one aspect of our clients’ fight against this unfair measure. Together with their impressive and growing coalition, they will continue to engage with the government, and the legal team wishes them every success.”

A glimmer of hope remains with a new Chancellor in place since the summer, Philip Hammond MP, a past property company executive himself who will soon deliver an eagerly awaited Autumn Statement setting out his economic and tax policy for the Spring 2017 budget, and the coming 12 months. The “Axe the Tenant Tax” group has said it will continue the fight against Section 24 of the Finance Act 2015 by pressing the matter with government.

Messrs Bolton and Cooper told the media:

“We are outraged by the court’s decision. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of Section 24.

“From April 2017 the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50% over a three year period, will be felt far and wide. Sadly it will be tenants who are hit hardest; they are set to see unprecedented rent increases over the coming months and years, which will be a very clear and direct consequence of this ludicrous legislation.

“For many, it will also mean the loss of their homes because vast numbers of landlords will be forced to exit the market. Hard-working, responsible landlords will have their pension plans in ruins, but the large corporations and the wealthiest in society, who can buy property without the need for mortgage finance, are systematically excluded from this unfair tax policy.

“Now that the legal route has run its course, we will be focussing 100% of our attention and resources on taking our case more forcefully, more powerfully and more directly, right to the heart of Government. Our goal is simple: to abolish this tax or to remove the retrospective nature of it.

“We will be launching a range of lobbying, media and grass-roots activism measures over the coming days and weeks. We will also be encouraging all of our landlords to write to their tenants if they have to increase their rents or sell up, clearly explaining that it is this Conservative tax policy that has forced them into this situation.”

The National Landlords Association (NLA) chief executive, Richard Lambert has said:

“While we have never been convinced that there was a solid enough legal case to overturn George Osborne’s decision, we hoped the courts would be prepared at least to listen to the arguments.

“We congratulate Steve, Chris and the campaign team on their determination, perseverance, and their success in raising awareness and increasing the visibility and understanding of what will be a dramatic change to the ability of hard working people to provide homes for others.

“This issue has been the focus of the NLA’s lobbying for the past 15 months and, as the UK’s largest representative body for landlords, we are still committed to changing this damaging policy through political engagement and lobbying. We urge all landlords to join us in this fight.”

And Residential Landlords Association (RLA) policy director, David Smith has said:

“Having provided support for this case, the RLA is disappointed it will not progress to a full judicial review.

“The campaign to seek changes that will address the more difficult aspects of recent tax reforms to the private rented sector must now focus on a political path.

“The Autumn Statement next month provides an important opportunity for the Government to make changes that will support the development of the new homes to rent the country desperately needs.

“The RLA has already met with Treasury officials to discuss the issue and it will continue to lobby for changes that are good for tenants and landlords, whilst recognising the government’s limited financial room for manoeuvre.”

Cherie Blair and husband Tony Blair own, with their children, a number of rental properties estimated to be worth around £25m.

Please Note: This Article is 6 years old. This increases the likelihood that some or all of it's content is now outdated.


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