Taxing Times/ MoneySavingExpert.com Discussion

Former_MSE_Archna · 26 September 2005 at 5:10PM

This thread relates to the article Taxing Times. Click reply to discuss.

NeilW · 26 September 2005 at 8:01PM

Excellent article full of good advice.

I would like to take issue with one small point though. If you have a buy to let property and extend the mortgage on it then the interest is still fully allowable for tax purposes in the following circumstance.

Let's say you buy a house for £150K and £112.5K mortgage on it (which happens to be 75% of the property value). This is then let, and the interest on the mortgage is fully allowable in the normal fashion.

However if three years later the house has risen to £200K and you remortgage to 75% again giving you a mortgage of £150K, but blow the proceeds on a wild party in the Bahamas then the interest on the loan is still fully tax deductible. This is because all you have done is withdrawn the remaining equity from your letting business.

You are entitled to withdraw any equity from the letting business that you put in in the first place. What you are not allowed to do is withdraw using loans beyond what the house originally cost (in this case £150K).

Hope that is useful

NeilW

sneekymum · 26 September 2005 at 9:57PM

Very brave of Mr Tesciuba to be I presume the first of many "star" guests.

I don't know about the other boards but the Pure Money Forum is full of highly qualified and experienced accountants, tax officials and IFAs - plus ordinary people who might have first hand experience to share. These people give up their valuable time to help others for no reward. Yes, much rubbish is spoken and misinformation given - but I've fired a few IFAs, accountants and solicitors for much the same crimes, and the real experts - like Mr Tesciuba - always carry a disclaimer. After all, if you want tax advice you can always pay for it. Unless you're poor - then you can get it free from TaxAid.

As the last entry shows, these forums are a fantastic resourse in that others are able to add, enhance or simply correct the information given. So I'm not sure how a stand alone approach marries with this. Still, perhaps some of the regulars here will welcome their chance to feature a link to their own web pages...

TaxTony · 27 September 2005 at 3:39PM

Neil - agreed! I've changed the Q&As to make your point. Have a look at the Revenue's manual linked in the new answer. They go even further and allow a loan against the valuation of the borrower's former home, never mind the original cost. If it wasn't the Revenue saying it, I'm not sure I'd believe it.

sneekymum · 27 September 2005 at 5:03PM

ooooh I'm the first (ever) to thank TaxTony.... :T

MSE_Martin · 27 September 2005 at 7:43PM

Hi Sneekymum.

It's an interesting point you make. The reason i bring in experts (tony is number 2, plumbing was first) is because it means

i. You genuinely know who the info is coming from, much of the info on here is very good, but just because someone says they're an accountant, doesn't mean they are

ii. It is done in article format and forms an easy Q&A which can be aided by the discussion link. There's a wee bit of a misperception about the forums which I understand - they often seem the dominant force. In actual fact the forums number of usage and views are a relatively small proportion of the overall site use.

There are nearly 1 million unique users of the site a month; 325,000 get the email tip and only 50,000 have ever posted in the forum. An article is a different style and very useful to many people who just want to dip in.

This isn't to denigrate what happens here. It's fantastic. Yet by having and easy to glance Q&A that reaches many people it works.

iii. Why Tony. Four reasons. Of course he's my Uncle, and that means I have a huge deal of trust in him. Second. He's my accountant and extremely good at it. Third. He's a nearly 30 year (sorry Tony) experienced ex-managing partner of a large accountancy firm. Four. Because he did it without pay, and understands what the site is about.

I hope this explains why. I for one was gobsmacked with the huge amount of info and work he put into it - there's a lot of effort.

Martin

sneekymum · 27 September 2005 at 8:15PM

Mother was very impressed. Her accountants are also in Manchester (and useless) - she's moving to Uncle Tony when they've finished this year's tax return...I bet there's enough info here to identify her....

Anita_Drake · 28 September 2005 at 9:55PM

My husband is thinking about opening a SIPPS pension.
Question is this...Does there have to be a minimum amount.? He has 3 personal pensions frozen from previous employment.
Also , when calculating his income is the contribution to the SIPPS taken into account before or aftertax? and is this shown on his payslips or seperate paperwork>?
Thanks for any advice you may have anyone.
geminigirl

andi_the_valley · 29 September 2005 at 12:41AM

Can anyone help??
General question if taxman makes mistake and refunds overpayment on correctly posted figures. What period of time must elapse before the taxman can't ask for it tobe returned?

NMckay15_2 · 5 January 2006 at 11:15AM

Guidance is needed for peace of mind!
I just started taking over filling in my husbands online tax return, as he is a self employed contract cleaner. He has previously used an expensive accountant, but only earns around 14k pa. I used all his petrol receipts as I should have but didn't allow for personal use, not related to the business (probably only totalling 10% of total). This tax return has gone through now, what should I do???

suki01 · 5 January 2006 at 9:27PM

we are also not impressed with our accountants advice.

is it benificial to do tax returns for me and my husband we both work full time but the mortgage is in his name only.

would it be of more benifit change our buy to let property in the next tax year into a pension fund

Taxing Times/ MoneySavingExpert.com Discussion

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