In case people weren't aware, the recent budget contained changes to tax treatment of Buy To Let properties which could likely see significant tax rises for BTL landlords. I didn't see the budget myself, but this is featuring heavily in the Telegraph this weekend, and one would almost be forgiven for thinking this was being snuck in under the radar. I don't know.
Death of buy-to-let: landlords wake up to Osborne's 150pc tax - Telegraph
What has this got to do with mil aviation many PPruNe purists will be asking. Well nothing in the sense that it isn't per se about flying, but service personnel may find themselves on the wrong end of this if they are posted away from home and end up renting their house out. In the past tax was only payable on profits i.e. after mortgage interest was taken into account. Under this measure tax will be payable on turnover i.e. whatever you receive in rental income pre-tax. Some of the examples given in the DT suggest a tax rise approaching 90%, although this is probably at the extreme end of things and makes for good copy.
However, it strikes me that service personnel are potentially going to be dragged in to this involuntarily because they are required to move and don't want to step off the property ladder or hope to return home down the line. Furthermore, what if having paid elevated tax for several years a service person decides to sell up and HMRC refuses to accept that it was the individual's main residence because it's been rented? Would they then be liable for CGT on the sale creating a possible double whammy?
I don't have any answers, but talking to friends currently on NATO tours and renting their houses out whilst away there appears to be limited awareness of this move and the possible implications for service personnel. I would like to think that MOD will be aware and already engaging with HMRC to ensure service personnel are not disadvantaged. Hopefully Al will be along to shed light on the best place to turn for advice!