A legal opinion is expected in the next few days as the legal challenge to George Osborne’s buy to let tax changes gathers pace.
Letting Agent Today reported last week that a crowdfunding campaign was raising £50,000 to fund a bid by two landlords to seek judicial review of the measures, based around the restriction of mortgage relief for buy to let investors to only the basic rate of income tax, even for investors paying higher rates, and a change in the Wear and Tear Allowance, permitting landlords to claim only for repairs involving receipts.
The final donations of the £50,000 were made on Sunday.
The review is being sought by Steve Bolton, whose Platinum Property Partners business has £200m of residential property in its portfolio, and fellow landlord Chris Cooper. They contend that the Finance Act 2015 - containing the measures - includes Clause 24, overturns fundamental financial business principles.
These include what Bolton and Cooper describes as “a long-established principle of taxation that expenses incurred wholly and exclusively for the purposes of the business are deductible when calculating the taxable profits”.
A post on the ‘Clause 24’ campaign’s Facebook page says:
“The legal briefing document was sent to the law firm [Monday] morning at 8.58am.They are now working on the case and we expect that it will take no more than 7 working days to get full written legal 'Opinion'. From there we will be moving forward with a pre-action protocol letter to the Government, which sets out our case and outlines the changes sought. After our application for judicial review is filed, the Government has 21 days to file its defence. If the case proceeds, a full court hearing would be scheduled.”
Omnia Strategy, founded and chaired by Cherie Blair QC - wife of former prime minister Tony Blair - has been appointed to represent landlords' interests.