Tax credit

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    Tax credit

    Hi Folks

    Another new member here, hello to all.

    I hope this has not been covered before as I cannot find it any where.

    I am renting out a property and not long since contacted inland revenue for tax for 2017/18. I am a basic rate tax payer and have an interest mortgage on the property. I am aware that the tax relief rules have changed and are going up incrementally form this year. It is my understanding this is to get more return from higher rate tax payers?
    Anyway the inland revenue have informed they they will take a straight 20% from the profit declared from my wages. It was my understanding that a tax credit would then be credited to compenstae, however I cannot see this being done. Can anyone clarify if this is this case and at what stage this would be carried out?

    Also can anyone confirm if a£1000 property allowance is still in place where this amount is tax free from the first thousand in profit? I spoke with someone from the inland revenue regarding this, they could not give me an answer so I did not take this into account, worrying that it could be wrong.

    As as you can tell from the above I am inexperienced in this area and really became a landlord by accident. We wanted to move to another area as a family but my partner did not wish to sell the original house we were in as her Father had built it and she had emotional ties to it. Renting this property was the only solution. If it had been my decision alone I would have sold up completely and bought what we could afford outright as we moved to a less expensive area.

    Anyways, any help would be appreciated.


    That's not possible, as Inland Revenue hasn't existed for a long time.

    It sounds like they are adjusting your tax code, which is a very standard way of dealing with relatively small under-taxations.

    I think you will need to fill in a tax return, but they will ask you for gross pay and actual tax, from the P.60. They'll then calculate the tax you should have paid for everything and compare it with the tax actually collected, and make adjustments, if they don't match up.


      leaseholder64 Thanks for your reply. Okay yes I'm living in the past😀HMRC. The profit is so small that I don't need to do a tax return apparently. The point I wanted to check was do I receive a credit at any stage from HMRC. As far as I can work out, if a person is a lower tax payer then this change should not affect them financially?

      Also, can anyone clarify if the first £1k profit is an allowance and tax free?




        No such thing as a 1000 profit exemption. You are thinking about interest on savings.

        Not having to do a tax return is not the same as not having to pay tax. And the requirement to do a tax return depends on income (and other things) not profit.

        Are you sure you are calculating your profit correctly? It is the mortgage interest only not the full mortgage. Unless you are involved in some big losses and repairs it is most unlikely you will be making less than 1K profit/year and HMRC will likely investigate -- it is not worth the risk.

        Some numbers would be interesting.


        Latest Activity


        • tax responsibility and allowable expenses
          Hello, wondering if anyone can help.

          Firstly, my husband and I are joint owners of our rental property but I heard that we can change things so the tax is based on my income alone. Is this true? If so how can I go about arranging this. I earn alot less than my husband.

          23-04-2019, 20:58 PM
        • Reply to tax responsibility and allowable expenses
          I never ask HMRC for tax advice, I'll ask my accountant next time I see him.
          25-04-2019, 10:42 AM
        • Reply to tax responsibility and allowable expenses
          Send an enquiry to your tax office and ask if they agree with you.
          25-04-2019, 09:50 AM
        • Reply to tax responsibility and allowable expenses
          It's interesting, then.

          It took me a lot of research and persuasion to accept that a residential loan could ever be allowable as solely and exclusively for a BTL purchase.
          I was obviously wrong, because it's quite common, but my reasoning was that the money is extracted from the residential...
          25-04-2019, 08:26 AM
        • Reply to tax responsibility and allowable expenses

          I think you really are " THE ONE " with superior knowledge on tax matters by being able to respond to a far wider range of questions.

          Replying to your question, my thinking ( and I could be wrong ) is :

          When you claim mortgage interest on...
          24-04-2019, 21:36 PM
        • Reply to tax responsibility and allowable expenses
          I bow to your superior knowledge (as always).

          Could you point me at some reason why, because I would have thought that it would be allowable?
          It's essentially the same as a business remortgage....
          24-04-2019, 12:52 PM
        • Reply to tax responsibility and allowable expenses
          Q1. if you are given tax return SA211 2019 to complete , then read the section 6.1 ( property let jointly ) ,

          Q2. No, its too late. It only allowable if you had use the money raised from house to buy the property.
          24-04-2019, 11:57 AM
        • Reply to tax responsibility and allowable expenses
          If you are the landlord and your husband isn't, the income would be yours.
          It becomes a little more complex if it's paid into a joint account.

          Essentially, tax is paid on beneficial income, so if your husband enjoys the results of the income, it's really his income as well.
          24-04-2019, 09:30 AM
        • Moving into my Buy to Let
          I’m considering selling my primary residence and moving into my buy to let. I then will want to sell the buy to let in a couple of years time and then buy a new primary residence outright. Reason for this is to consolidate my assets and buy my next family home outright.
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          22-04-2019, 17:23 PM
        • Reply to Moving into my Buy to Let
          The gain achieved during "primary residence period" is exempt for cgt. .

          The gain achieved during the BTL period is liable to cgt at 18% or 28%

          Primary residence can be claimed for the period in residence plus up to 9 months after moving out
          24-04-2019, 01:39 AM