Landlord self-assessment help

Nomunnofun1

FlorayG said:

OP are you aware you pay tax on the INCOME not the PROFIT?

Are you sure? 

saajan_12

Syandc said:

My rental income for 23/24 was £5025, my mortgage payments were £3183

How much of that payment is the actual interest vs capital repayment? 

Syandc said:

Btw forgot to mention that I am a basic tax rate payer.

What's your total other income? If you're close to the border then some of your rental income may still be taxed at 40%. 

I see people are jumping to solutions, but no one can accurately advise without answers to teh above. 

Nomunnofun1

saajan_12 said:

Syandc said:

My rental income for 23/24 was £5025, my mortgage payments were £3183

How much of that payment is the actual interest vs capital repayment? 

Syandc said:

Btw forgot to mention that I am a basic tax rate payer.

What's your total other income? If you're close to the border then some of your rental income may still be taxed at 40%. 

I see people are jumping to solutions, but no one can accurately advise without answers to teh above. 

Not sure what you mean by ‘jumping to solutions’ - the question was centred on completing the property pages and has been fully what with. Other income, while obviously affecting the amount of tax payable, has no bearing on the advice given. 

Syandc

Thanks everyone. To answer a few questions raised, I do realise I pay tax on the income not the profit. And I do realise that I cannot claim for both property allowance and mortgage interest. I was asking which would be better for me.

None of my mortgage payments are capital, it is an interest only mortgage. 

My total other income per annum gross is £28,000 so not near the border. 

I though my query was answered though. I left the property allowance blank and filled in the finance costs box instead. But tax is still coming out as £560. Any further thoughts anyone? At least I want to check that this section is correct. Seems like the finance costs (mortgage interest payments) haven't affected this. 

Nomunnofun1

Syandc said:

Thanks everyone. To answer a few questions raised, I do realise I pay tax on the income not the profit. And I do realise that I cannot claim for both property allowance and mortgage interest. I was asking which would be better for me.

None of my mortgage payments are capital, it is an interest only mortgage. 

My total other income per annum gross is £28,000 so not near the border. 

I though my query was answered though. I left the property allowance blank and filled in the finance costs box instead. But tax is still coming out as £560. Any further thoughts anyone? At least I want to check that this section is correct. Seems like the finance costs (mortgage interest payments) haven't affected this. 

The finance costs come off later in the calculation as a tax deduction of 20% - in your case £636.60. 

By the way, you pay tax on your profit, not the income - ignore the previous advice on that. 

The tax payable on the property profit should be £243.40 - perhaps the balance of the amount due is a result of your other income?

What tax was deducted from the £28000?

Syandc

I think I have figured it out now - it was a student loan deduction because the rental income tipped me over the threshold. Annoying! Thanks for all your help.