Landlords’ challenge to tax changes rejected
A crowd-funded challenge to the enactment of s 24 of the Finance (No 2) Act 2015 has been rejected in the Administrative Court.
The effect of the new legislation is progressively to disallow the deductibility of mortgage interest, for the purposes of income tax payable by individuals in respect of residential lettings, starting in 2017-18. No corresponding alteration is made in respect of corporation tax, nor in respect of income tax payable by those engaged in furnished holiday letting.
The claimants alleged that the challenged provision amounted to unlawful state aid to those who were not within its scope, rendered unlawful by article 107(1) TFEU. They also said it amounted to interference with the human rights of the individual taxpayers, protected under Article 1 of Protocol 1 to the Convention, and Article 14.
Lewis J had rejected the claims on the papers. On the renewed oral hearing, Dingemans J held that companies and those engaged in holiday letting were not in the same factual and legal position as the claimants. He also held that the claimants had no rights amounting to possessions, and that there had been no discrimination, for Convention purposes. The claim was therefore not arguable.
Timothy Brennan QC appeared for HM Revenue & Customs and HM Treasury.
Read The Guardian article here.
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