Expat Mortgage Brokers for UK Property
#16
Re: Expat Mortgage Brokers for UK Property
So the "basic rate band" is the 20% band which people will initially pay tax at after personal allowance. As earnings increase people go into the higher bands.
As a example of the figures. Let's presume you are a higher tax rate payer due to your employment income. But you also earn £1,700 in rent, have £200 of maintenance expenses and pay £500 in mortgage interest.
Prior to the changes the higher rate tax payer would pay tax of (1700-200-500) @40% = £400
Now the interest can only be relieved at the basic rate so the tax payer would pay tax of (1700-200)@40% minus 500@20% = £500.
So higher rate taxpayer is £100 worse off.
#17
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: Expat Mortgage Brokers for UK Property
I did not mention "basic interest". I said that interest could only be offset at the basic rate (meaning basic tax rate).
So the "basic rate band" is the 20% band which people will initially pay tax at after personal allowance. As earnings increase people go into the higher bands.
As a example of the figures. Let's presume you are a higher tax rate payer due to your employment income. But you also earn £1,700 in rent, have £200 of maintenance expenses and pay £500 in mortgage interest.
Prior to the changes the higher rate tax payer would pay tax of (1700-200-500) @40% = £400
Now the interest can only be relieved at the basic rate so the tax payer would pay tax of (1700-200)@40% minus 500@20% = £500.
So higher rate taxpayer is £100 worse off.
So the "basic rate band" is the 20% band which people will initially pay tax at after personal allowance. As earnings increase people go into the higher bands.
As a example of the figures. Let's presume you are a higher tax rate payer due to your employment income. But you also earn £1,700 in rent, have £200 of maintenance expenses and pay £500 in mortgage interest.
Prior to the changes the higher rate tax payer would pay tax of (1700-200-500) @40% = £400
Now the interest can only be relieved at the basic rate so the tax payer would pay tax of (1700-200)@40% minus 500@20% = £500.
So higher rate taxpayer is £100 worse off.
#18
Forum Regular
Thread Starter
Joined: Feb 2009
Location: From Capital of Culture '08 to Capital of WA '12
Posts: 76
Re: Expat Mortgage Brokers for UK Property
Not too sure about brokers, but you do realise that the laws on buy-to-let have changed very recently or are about o, and also the rules on taxation of them, so it might be a good idea, if you haven't already done so, to familiarise yourself with them. A number of UK owners of rental properties have already said that with the new regulations they are going to have to sell up.
Cheers.