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  • FIRST POST
    • FrankRizzo
    • By FrankRizzo 9th Apr 18, 4:30 PM
    • 96Posts
    • 67Thanks
    FrankRizzo
    Income Tax - Sorry might be a stupid question
    • #1
    • 9th Apr 18, 4:30 PM
    Income Tax - Sorry might be a stupid question 9th Apr 18 at 4:30 PM
    Can anyone help?

    I am currently a Basic Rate 20% tax payer (up to 43k) and I am looking to rent out my flat. Going by the . gov website it will put me above my income threshold and would make me a Higher Rate 40% tax payer (43k+) i.e 35k salary and 8.5k income from my flat = 43.5k total annual income. Is that how it works?

    Any help appreciated...
    Last edited by FrankRizzo; 09-04-2018 at 4:39 PM.
Page 1
    • Malchester
    • By Malchester 9th Apr 18, 4:48 PM
    • 127 Posts
    • 80 Thanks
    Malchester
    • #2
    • 9th Apr 18, 4:48 PM
    • #2
    • 9th Apr 18, 4:48 PM
    I don't know the answer to your question but no question is stupid (even if some who post on here make you feel small with their sarcastic replies). If you want to know something that you do not already know ask a question.
    • sheramber
    • By sheramber 9th Apr 18, 4:56 PM
    • 5,245 Posts
    • 3,909 Thanks
    sheramber
    • #3
    • 9th Apr 18, 4:56 PM
    • #3
    • 9th Apr 18, 4:56 PM
    If you are in England

    https://www.gov.uk/income-tax-rates

    If you are in Scotland

    http://www.gov.scot/Topics/Government/Finance/scottishapproach/Scottishincometax2018-2019
    • pinklady21
    • By pinklady21 9th Apr 18, 5:52 PM
    • 740 Posts
    • 552 Thanks
    pinklady21
    • #4
    • 9th Apr 18, 5:52 PM
    • #4
    • 9th Apr 18, 5:52 PM
    Not a silly question at all!
    I am also interested to understand how the new rules on interest relating to property income are calculated.
    Previously, you took the income, deducted the expenses, and put the net profit on the tax return.
    I believe that as the reliefs for mortgage interest on let property have changed from 17/18, the income from property is now added in with other income before expenses are taken off.
    So possible to be in theory a higher rate tax payer, as the property income takes you into the band, but not be making much profit as once the expenses come off, you still have a tax liability that you may not have had in previous years.
    Sorry -not explaining very well - which shows that I probably do not fully understand it properly.
    Can anyone give a 101 explanation of this please? Thank you!
    • AnotherJoe
    • By AnotherJoe 9th Apr 18, 6:29 PM
    • 10,620 Posts
    • 12,160 Thanks
    AnotherJoe
    • #5
    • 9th Apr 18, 6:29 PM
    • #5
    • 9th Apr 18, 6:29 PM
    You can lower your income (I beleive) by making pension contributions so as to cancel out the additional rental income.
    • 00ec25
    • By 00ec25 9th Apr 18, 7:13 PM
    • 6,989 Posts
    • 6,660 Thanks
    00ec25
    • #6
    • 9th Apr 18, 7:13 PM
    • #6
    • 9th Apr 18, 7:13 PM
    Can anyone give a 101 explanation of this please? Thank you!
    Originally posted by pinklady21
    the explanation is rather long and therefore much easier if you just read the guide that explains it

    https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies
    • 00ec25
    • By 00ec25 9th Apr 18, 7:18 PM
    • 6,989 Posts
    • 6,660 Thanks
    00ec25
    • #7
    • 9th Apr 18, 7:18 PM
    • #7
    • 9th Apr 18, 7:18 PM
    35k salary and 8.5k income from my flat = 43.5k total annual income. Is that how it works?

    Any help appreciated...
    Originally posted by FrankRizzo
    since you are looking to let your property that implies you have not done so to date and therefore you should be looking at the 18/19 tax year figures, not the old ones you seem to be using

    higher rate tax bracket for 18/19 starts at 46,350 so not really sure what you are thinking, you area and will be a basic rate taxpayer on those figures
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