Help with Calculating TAX On Rental Income ? YEAR 2018-2019

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    Help with Calculating TAX On Rental Income ? YEAR 2018-2019

    Dear All

    I understand there have been some changes recently when it comes with calculating rental income and how much tax needs to be paid.
    Was wondering if there is some website that helps with calculations since my situation is relatively simple.

    The YEAR 2018-2019

    Rental Income £ 16500
    Mortgage Interests £ 8400

    The income after expenses
    I Self Employed I £ 7000

    I had void months so my income was lower than usual.


    Thanks for the help!

    Rgds


    #2
    You deduct any allowable costs (not the interest) from the income, if there are none, that leaves £16,500.
    You add that to your other taxable income (is that the £7000?) and that's your entire taxable income, and you calculate the tax due on that.

    Then you deduct the restricted interest allowance, which is 20% if you're a basic rate tax payer and 30% if you're a higher rate tax payer.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thanks for answer
      My expenses were £ 3800

      But i read somewhere like i can only deduct 50 % of mortgage interest costs?
      If that makes sense...

      Yes..i am a basic taxpayer

      Comment


        #4
        Do it online with HMRC SA and they'll tell you.
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          Originally posted by alenuk View Post
          Thanks for answer
          My expenses were £ 3800

          But i read somewhere like i can only deduct 50 % of mortgage interest costs?
          If that makes sense...

          Yes..i am a basic taxpayer
          If you're a basic rate tax payer all that's changed relating to mortgage interest is how you calcualate the allowance.

          Higher (40%) tax payers will be restricted to claiming at the basic rate once the changes have been phased in.
          So that would mean that they can only claim at 20% - which is where the half comes in, but it doesn't affect most landlords

          So your rental income is £12,700 and your other income is £7000. So your taxable income is 19,700.
          Which means that you're going to pay income tax on £7,200 which is £1,440.
          You then deduct the mortgage interest restriction (20% of £8,400 which is £1,680) which means you'll have no tax to pay.

          Check the figures, because I've just done that in my head and it's not my strong suit.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Thanks very much.
            Amazing staff ..knowing you done all that in your head.:-) /HMRC can give you a job in one second
            only thing is tax code was different £ 11800 instead of 12 500

            all the best

            Comment


              #7
              Originally posted by theartfullodger View Post
              Do it online with HMRC SA and they'll tell you.
              if you're a UK resident, otherwise you have to use their approved software to file online. OP seems to be resident but other readers might not be.

              Comment

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