buy to let income, affecting future state pension ?

Galeeno

Situation of the person
- Single,
-Now working, (but in 5 years will be the state pension age, and will retire then)
-the first property they live in
-any additional property will be purchased (under a buy to let mortgage) in their name, deeds under their name, mortgage under their name ..and rented out.

The main question is will their state pension rate in 5 years (the full state pension) be affected by this additional income/buy to let?


If not affected now, how will the full state pension rate/amount be affected? (is, is there chance the full state pension amount a week might not be given to the person, due to the fact they have this buy to let 'additional income'

or is there a certain threshold that they have to go above in ££ in order to make the state pension NOT affected?

or for eg, make sure the rent does not produce any profit, so that it is just even...so there is no actual profit of income? (so change the rent amount -

eg, mortgage amount = £600 ...then make the rent amount = £600,

compared to , making the rent amount £700 (for a £100 profit a month = £1200 profit a year)


In other words:

If you have a few properties bought and rented, (buy to let mortgages)

and you will be in your state pension year in 5 years time, and retired from work then (now are currently working)

then can these buy to let properties, which are rented, affect your state pension amount/rate, (through / via the inland revenue/tax code?)

(as buy to let properties are seen to be a way to make an additional income. ie making money)


Would this affect the state pension amount , at the state pension age?

How would it affect the state pension ?
-added: Even through Tax? (as the rental income would be taxable)

If affected through tax, how would it affect tax?

and what would be the tax ££ thresholds, that would ensure that the amount of pension weekly would NOT be affected ? ??

Is there any way around it?, like to reduce tax..

The properties in the buy to let are in the name of the person who will be in the state pension (deeds and mortgage, as in their name), so just asking how the state pension would be affected, due to these additional incomes..

Has this happened to you? share your experience.

paddedjohn

First hurdle would be getting a bank to give you a mortgage at that age.

FLAPJACK

As far as I know (someone who WILL know will be around soon) your level of SP is entirely reflective of you NIC's. If at 65 you have the full requirement of "contributing years" then a full SP will be payable.

Any other income from say investments or in your case rent just gets added to your income.

What the extra income will do though is maybe affect how much tax you pay.

If the combined income from SP and the rent takes you over your annual tax allowance then any income over the threshold will be taxed. The fact that the rent you receive matches exactly the amount of the monthly mortgage payment in neither here nor there....in the eyes of the taxman it is still an income.

Next April the personal allowance for tax is £10,000, so anything over that figure is taxable....

[Deleted User]

Hi,

the state pension will not be affected, as it is not means tested nor taxed.

Any other income will be subject to the usual rules.

[Deleted User]

the new SP comes in by 2016 where if you have the cont you will get atm £144 per week,i think you need 35 years

Dunroamin

[Deleted User] wrote:

Hi,

the state pension will not be affected, as it is not means tested nor taxed.

Any other income will be subject to the usual rules.

It is taxed if it exceeds the personal tax allowance.

Dunroamin

woodbine wrote: »

the new sp comes in by 2016 where if you have the cont you will get atm £144 per week,i think you need 35 years

2017......

xylophone

2017......

No- changed to 2016 https://www.gov.uk/changes-state-pension

"The government has proposed that the new flat rate (single-tier) pension will be introduced from April 2016."

[Deleted User]

Hi,

[Deleted User] wrote:

Hi,

the state pension will not be affected, as it is not means tested nor taxed.

Any other income will be subject to the usual rules.

Dunroamin wrote: »

It is taxed if it exceeds the personal tax allowance.

Oops, , the state pension itself is paid without tax deducted, but then included with any other income, and total may be liable for tax if over the tax free allowance.

Click.

Dunroamin

[Deleted User] wrote:

Hi,





Oops, , the state pension itself is paid without tax deducted, but then included with any other income, and total may be liable for tax if over the tax free allowance.

Click.

But the state pension itself will be taxed if it exceeds the personal allowance, even without any additional income.

Dunroamin

xylophone wrote: »

No- changed to 2016 https://www.gov.uk/changes-state-pension

"The government has proposed that the new flat rate (single-tier) pension will be introduced from April 2016."

Thanks, I forgot they brought it forward this year.:o