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Student Finance Plan 2 and Post Graduate Loan - PAYE and Property Income
tasticz
Posts: 775 Forumite
in Cutting tax
I may be able to buy a BTL property but unsure if student finance repayment will be due on it.
Let's say, I have a PAYE income of £48,000 (gross PA) and if I buy a BTL property then the rental income will be circa £20,000.
This makes my total income to be £68,000.
I know I will need to effectively pay 40% tax on the property income and will only get 20% mortgage credit relief which means I end up paying double the tax on mortgage compared to a 20% tax payer (assuming no other expenses).
What about student finance repayment? How will it work for rental property? Does this mean I will pay 9% above £26k on Plan 2 Student Loan and 6% above 21k on Postgraduate Loan on full 68k or does the rental income get treated like a second job and as it is below the threshold, I don't need to pay any repayment on the student finance.
Any guidance is appreciated.
Let's say, I have a PAYE income of £48,000 (gross PA) and if I buy a BTL property then the rental income will be circa £20,000.
This makes my total income to be £68,000.
I know I will need to effectively pay 40% tax on the property income and will only get 20% mortgage credit relief which means I end up paying double the tax on mortgage compared to a 20% tax payer (assuming no other expenses).
What about student finance repayment? How will it work for rental property? Does this mean I will pay 9% above £26k on Plan 2 Student Loan and 6% above 21k on Postgraduate Loan on full 68k or does the rental income get treated like a second job and as it is below the threshold, I don't need to pay any repayment on the student finance.
Any guidance is appreciated.
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Comments
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https://www.litrg.org.uk/tax-guides/students/student-loans
Your rental income is over the threshold of £2000
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