A legal challenge to controversial tax hikes on buy-to-let landlords has been thrown out by a High Court judge.
Private landlords complained about changes to the tax regime which they say will cost them much - in some cases all - of their profits.
Section 24 of the Finance (No.2) Act 2015 is due to come into force next year and to be phased in fully by 2020 to 2021.
It will restrict individual landlords' ability to deduct mortgage interest, and other finance costs, from their rental income to 20 per cent.
But the same restriction will not apply to corporate landlords and owners of furnished holiday lettings.
Two private landlords, backed by pressure group "Axe the Tenant Tax", today (6 October) attacked the change in the law at London's High Court.
Their lawyers argued it breached European free competition rules and violated their human right to freely enjoy their private possessions.
However, Mr Justice Dingemans this afternoon declared their complaints unarguable and refused to open the way for a full hearing.
He said the Government had "the widest margin of appreciation" and "a wide discretion exists in tax matters for good constitutional reasons".
He added the case was "another example of incorporated entities being treated differently to individuals by the legislature.
"The extent to which they should be treated differently raises political and economic questions, but not in this instance a legal one."
Refusing to allow a full hearing of the case, he concluded: "It would be a miserable spectacle watching a case bound to fail ... fail."
Barrister Conor Quigley QC earlier argued that section 24 will "distort competition" in the private rental market in breach of European law.
By handing an economic advantage to "direct competitors" of individual landlords, the government was guilty of unlawful state aid, he claimed.
Corporate and individual landlords were competing for tenants in the same marketplace and section 24 would give the former an unfair advantage.
Property tycoon, Steve Bolton, from Bournemouth, and fellow landlord, Christopher Cooper, were also represented in court by Cherie Booth QC.
And both barristers say there was a "conspicuous public interest" in the complaints of buy-to-let landlords being given a full High Court hearing.
But HM Revenue & Customs and HM Treasury argued the attack on section 24 was misconceived.
Timothy Brennan QC said there was "no equivalence" between the tax treatment of individual landlords, corporate landlords and holiday home owners.
The purpose of the ban on state aid, he added, was to prevent distortion of competition between European Union member states, not within the UK market.
Corporate and holiday home landlords would be in exactly the same position as before and there was no question of them being "subsidised".
Individual landlords were simply not "comparing like with like" and their claims of discrimination were groundless, he added.
Their tax treatment did not amount to a "possession" and their arguments about human rights were also misconceived.
Mr Brennan urged the judge that, to allow the case to go further, would only give landlords "false hope".
In a press release put out before the case, Axe the Tenant Tax said section 24 meant most landlords with mortgages would in future have to pay tax on turnover, rather than profits.
No other business in the UK was treated in the same manner and, in some cases, tax payable would be greater than landlords' profits, the action group argued.
Mr Bolton is founder of Platinum Property Partners and Mr Cooper is a fellow landlord and cabin crew member.
