Staff mortgage & BIK tax implications... HELP

Jamie91Mc

Hi,

I work for a high street bank and currently have a £75K mortgage in my sole name on a staff rate following the BOE baste rate, currently 0.5%.

At the minute its all very simple and makes perfect sense for me to be on the staff rate.

However, I'm looking to move and have put an offer on a house this weekend which has spurred me into checking my figures to make sure they're concrete. I have a mortgage in principal from my current provider/employer...

But I've done a bit of reading and am now unsure how beneficial a staff mortgage would be in my new situation; I would have a part staff, part public rate mortgage

Property value; £220,000
Staff mortgage: £100,000 @ 0.5%
Public rate: £89,000 @ (say) 2.5%
40 year term

I have questions around how much BIk tax I would pay on this (i'm a basic rate tax payer) and whether it would actually be better to go for a full public rate mortgage. Does anybody here have any idea how much BIK tax i would be liable for? or how to calculate it/

Also the new mortgage would be in joint names with my partner who does not work for the bank, would she also have a BIk liability?

i;m a bit lost to say the least!

Thanks

Thrugelmir

The official rate used for calculating BIK is currently 2.5%.

BIK is calculated on the difference between the OR and the Staff Rate (SR).

To keep matters simple and purely as an example.

The BIK would be 2.5% - 0.5% =2%

£100k @2% = £2,000. At the basic rate of tax 20% = £400 additional tax to pay.

As you would have a repayment mortgage then the actual tax charge would be lower.

If you borrowed over a shorter term than 40 years. Then this would reduce your tax bill a little as well.

Edi81

If it!!!8217;s the high street bank I!!!8217;m thinking if there should be a BIK calculator on the internal internet.
The mortgage advisors can!!!8217;t give you details on the tax impacts.