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Buy to Let the silver-haired landlords

(5 Posts)
Readabook1 Thu 21-Apr-16 00:03:14

We are semi retired but want more income. We both have a property each and want to let one of them. One of us has a small mortgage and small income but even with
the rental income nowhere near the higher tax rate.
What is the situation re lower rate taxpayers under the new rules? I am confused as to which threshold they use to calculate when tax becomes due . Is the whole lot after the Personal allowance now taxed at 20per cent? Also what is the 20per cent tax credit exactly
Many thanks

specialsubject Thu 21-Apr-16 13:06:03

rental income is like any other income; put it all on your tax return, add it all up, deduct your personal allowance and any other allowances and pay 20% on the rest.

you'll be losing the tax relief on the mortgage from April 2017.

don't forget; permission to let, landlord buildings and contents insurance including malicious damage, legal expenses and rent guarantee insurance, refurb, gas safe, maintenance (who will be on call?), agents fees etc etc.

still worth it?

northerngoldilocks Tue 31-May-16 13:38:03

This loss of tax relief on mortgage interest is often quoted on mumsnet.

In fact what is happening is that the interest relief is being restricted to 20% - ie higher rate taxpayers will only get basic rate relief

northerngoldilocks Tue 31-May-16 13:38:42

oops - posted too soon. As you say you are basic rate taxpayers you will still get some interest relief at basic rate.

www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

Greengager Tue 31-May-16 13:45:31

You should be careful as you are now taxed on turnover rather than profit. This means that you can be unwittingly pushed into the higher tax bracket. There were some good article in the telegraph that explains this.

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