We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Student loan repayment and unearned income
sunshine87
Posts: 5 Forumite
in Loans
Hi, I was hoping for some help as I'm very confused!
Since leaving university I have never had to pay back my loan as I have always worked in jobs below the threshold.
Last year I was fortunate enough to inherit some money that I used to buy an apartment, which I currently rent out.
During 2016, I spent some of the year renovating the apartment and the rest of the year travelling so I was not employed and lived off savings and the rent I received from the apartment.
My question is - I read that you have to make a student loan repayment if unearned income (I assume this is unearned income?) is above £2000 for the year. Will I have to pay this even though I earned no other money and the amount in rent is well below the £17000 income threshold (I'm on student loan plan 1).
Also, can I offset costs such as service charge and ground rent - its a leasehold property - against the rental income?
Thanks in advance for your help!
Lucy
Since leaving university I have never had to pay back my loan as I have always worked in jobs below the threshold.
Last year I was fortunate enough to inherit some money that I used to buy an apartment, which I currently rent out.
During 2016, I spent some of the year renovating the apartment and the rest of the year travelling so I was not employed and lived off savings and the rent I received from the apartment.
My question is - I read that you have to make a student loan repayment if unearned income (I assume this is unearned income?) is above £2000 for the year. Will I have to pay this even though I earned no other money and the amount in rent is well below the £17000 income threshold (I'm on student loan plan 1).
Also, can I offset costs such as service charge and ground rent - its a leasehold property - against the rental income?
Thanks in advance for your help!
Lucy
0
Comments
-
sunshine87 wrote: »Hi, I was hoping for some help as I'm very confused!
Since leaving university I have never had to pay back my loan as I have always worked in jobs below the threshold.
Last year I was fortunate enough to inherit some money that I used to buy an apartment, which I currently rent out.
During 2016, I spent some of the year renovating the apartment and the rest of the year travelling so I was not employed and lived off savings and the rent I received from the apartment.
My question is - I read that you have to make a student loan repayment if unearned income (I assume this is unearned income?) is above £2000 for the year. Will I have to pay this even though I earned no other money and the amount in rent is well below the £17000 income threshold (I'm on student loan plan 1).
Also, can I offset costs such as service charge and ground rent - its a leasehold property - against the rental income?
Thanks in advance for your help!
Lucy
You only have to make student loan repayments on unearned income over £2,000 if total income is over the repayment threshold and HMRC have required you to fill in a tax return. If you don't submit a tax return you are not required to repay on unearned income.0 -
Thanks for your reply.
Will i not have to fill in a tax return for the money i make in rent? Even if its below any threshold for tax i thought i would still have to do a tax return?0 -
sunshine87 wrote: »Thanks for your reply.
Will i not have to fill in a tax return for the money i make in rent? Even if its below any threshold for tax i thought i would still have to do a tax return?
Depends how much rental income you get. If it's below £2,500 for the tax year then you can ring HMRC rather than fill out a tax return.0 -
-
Not having the place rented out year-round could take it that low I imagine, depends on what the apartment is PCM.Keep_pedalling wrote: »Surely no one is paying rent that low.0 -
Rather a lot of landlords don't declare their rental income and are blatently commiting fraud.
I'm not saying the OP is doing this at all. Just that if I were a landlord, I'd be more worried about that.
The fact the OP hasn't filled out a tax return is a big red flag though. Surely she wouldn't have felt it necessary to post this thread if she had, as then he'd be aware of how student loan repayments and unearned income work?
The £2500 rule was mentioned, whereby they only have to contact HMRC but even then surely HRMC would ask about unearned income and it would have had to have been declared then?
Interestingly, the OP has said on another post she made here that the flat is jointly owned her and her partner, so perhaps she doesn't own a large enough share. Still suggests to me though that HMRC needs to be contacted by at least one of them.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.7K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.7K Work, Benefits & Business
- 603.2K Mortgages, Homes & Bills
- 178.2K Life & Family
- 260.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards