Mortgage interest relief?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Phlash
    replied
    Originally posted by landlord2b View Post
    Thanks the the explanation. As I am a standard tax payer it makes no difference to me. I assume those with several properties will be pushed into the higher tax payer band and will see them paying more tax?? Is this likely to mean some people selling up?
    Hello. I think there will be consequences. I sold two units myself.

    There are other consequences - Cost of debt. Leverage ratios. Rent rises. The main thing is: It will be more difficult to buy property.

    I put a lot of effort into writing this on out of hours. People have found it quite useful to understand the mechanics and wider impacts:

    http://www.comfortlettings.co.uk/blo...x-consequences

    Leave a comment:


  • jpkeates
    replied
    I was referring to the 25% tax free sun that can be taken.
    Usually taking anything else can be punitive...

    Leave a comment:


  • theartfullodger
    replied
    Originally posted by jpkeates View Post
    Aren't the pensions being taken tax free?
    Wish they were: I pay tax on my various pensions, including state pension...or were you referring to payment to a pension fund??

    Leave a comment:


  • jpkeates
    replied
    Aren't the pensions being taken tax free?

    Leave a comment:


  • PJackson
    replied
    I have 7 properties let but it won't push me into the higher tax band by itself.

    In 2019 I can take some pensions without penalty and the combination would so I intend to see a former home (reduced CGT) and pay down mortgages with the proceeds.

    Leave a comment:


  • landlord2b
    replied
    Thanks the the explanation. As I am a standard tax payer it makes no difference to me. I assume those with several properties will be pushed into the higher tax payer band and will see them paying more tax?? Is this likely to mean some people selling up?

    Leave a comment:


  • jpkeates
    replied
    They're being phased in over the next four years, but the end position will be:
    You'll be taxed on the £9,000 income at your normal rate of tax.
    You'll be able to deduct from the tax due an allowance of 20% of the interest (whatever rate of tax you pay).

    Today:
    rent is £9000
    interest is £5000
    you pay tax on £4000 (so £800 for a base rate payer or £1600 for a higher rate payer).

    Future:
    rent is £9000
    interest is £5000
    you pay tax on £9000 (so £1800 for a base rate payer or £3600 for a higher rate payer).
    less an allowance of £1000 (so end result of £800 for a base rate payer or £2600 for a higher rate payer.)

    The messy bit is if the £9000 income takes you into being a higher rate tax payer, because that can happen.
    Which also moves you into a higher band for CGT.

    Leave a comment:


  • landlord2b
    started a topic Mortgage interest relief?

    Mortgage interest relief?

    Can someone here please explain to me how the new changes to mortgage interest relief work?
    If I receive rent of 9000 a year and my mortgage interest is 5000 a year then I would expect to be taxed on 4000, which at 20% would be 800 a year. (Ignoring any other deductions).
    Is this still correct or has this changed?
    Thanks

Latest Activity

Collapse

Working...
X