Self Assessment - Adjustable Net Income for Child Benefit Question: 12 on Self Assessment?

george987

Hi,
On Question 12 in the Self Assessment (Tailor your return 12 - Was your income over £50,000?), how do we calculate the Adjustable Net Income using Salary from Full Time job and Rental Income?

My friend receives a GROSS salary of £40K.

From his Gross Pay
-his Employer deducts around £5000/annum as Pension Contribution
-his Employer deducts Tax of around £5000
-his Employer deducts National Insurance of around £5000

At the end his Net Income (take home) from his salary is £25K/annum.

What will be his adjustable net income? Does he need to use his gross pay or net pay?
The question talks about deducting pension, so can he deduct his pension contribution from the gross pay?

He is also receiving around £24K as rent before all deductions and expenses.
From his Rental Income, he has expenses like property repairs, insurances, services like gas safety, management fee, and mortgage interest.

Can he deduct all these except mortgage interest before calculating Adjustable Net Income?
Thanks,

Jeremy535897

In his adjustable net income he will include gross pay £40,000 less salary sacrifice £5,000 re pension = £35,000, plus gross rent £24,000 less expenses such as property repairs, insurance, gas safety and management fees, but not mortgage interest.

george987

Thank you so much @Jeremy535897

So, his Adjustable Net Income will be calculated as:-

Income from Full Time Job: 40K (gross)-5K (pension deducted by employer) = £35K

Income from Property: 24K (Total Rent) - 5K (property repairs) - 2k (Services) - 1K (Management Fee) - 2K (Insurances) = 14K

So, total Adjustable Net Income = 35K (job) + 14K (property) = £49K

Therefore, his Net Income is less than 50K for Child Benefit purpose. So, he does not need to pay child benefit charges.

Many thanks 

[Deleted User]

On those figures - correct!

george987

Thank you so much for your help