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  • FIRST POST
    • funnymonkey
    • By funnymonkey 9th Mar 18, 6:57 AM
    • 109Posts
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    funnymonkey
    Working tax credits as a landlord?
    • #1
    • 9th Mar 18, 6:57 AM
    Working tax credits as a landlord? 9th Mar 18 at 6:57 AM
    Good morning
    Can anyone please help me?
    I have recently had to drastically reduce my working hours to look after my sick child.
    When claiming working tax credits should I only declare profit on my rental income or the full amount as new tax changes are being phased in until 2020
    Thank you
Page 1
    • 00ec25
    • By 00ec25 9th Mar 18, 7:23 AM
    • 6,511 Posts
    • 6,063 Thanks
    00ec25
    • #2
    • 9th Mar 18, 7:23 AM
    • #2
    • 9th Mar 18, 7:23 AM
    did you try to look up the rules yourself?

    https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/property-income/

    profits but calculated the old way without restricting the interest if you are a higher rate taxpayer (but then you'd not be claiming much in tax credits anyway if your were a 40% payer)

    https://www.litrg.org.uk/tax-guides/tax-credits-and-benefits/tax-credits/what-counts-income-tax-credits
    "Changes to property income
    From 6 April 2017, there are changes to how property income is calculated for tax purposes for residential landlords. The change basically means that there will be a restriction on how much you can deduct as expenses for finance costs including mortgage interest. By 2020, no expense deduction will be allowed for finance costs and instead you will need to claim a tax relief instead. See GOV.UK for more information.

    However, for tax credits, you will need to continue to calculate your income as you did before 6 April 2017. This means that you can deduct finance costs as an expense when working out your profit for tax credit purposes only. Whilst this is better for tax credit claimants, it does mean that you will need to work out a figure for tax credits that is different to the figure you will need to put on your tax return as your taxable property income."
    Last edited by 00ec25; 09-03-2018 at 7:30 AM.
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