Tax on rental income

sdd7677

Hi,
I am in full time employment with salary of £35,200. I am about to start buy to let. I just wonder do I have to pay 40% tax on profit of rental income as part of my income will be charged at 40% according to new tax bracket of 2013-2014 according to following link
http://www.hmrc.gov.uk/rates/it.htm

I would appreciate any help with this. Thank you so much.

nomunnofun

You need to make sure that this is the case. You will only pay tax at 40% on the part that is over £41450 (32010 basic rate band plus personal allowance of 9440). Remember also to deduct any payments to a company pension scheme before determining your taxable salary.

By way of example, if your rental PROFIT is £7000 (unlikely?), the tax due on it will be £1550. This will be £6250 at 20% with £750 charged at 40%.

If you are not in a company pension scheme but pay into one personally, let us know and we will recalculate.

sdd7677

Duhhh..still early week for me. How did I missed personal allowance?