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  • Section 24 HQ

    If you have a salary, S24 is a killer!



    I had a little spare time this morning and I thought I would look at a scenario comparing a working Landlord with a Landlord who only has BTL income.

    The figures are made up, but the S24 is high and I have only looked at the Tax situation 18/19

    So here goes:

    First the figs of a non working Landlord                              Working Landlord Salary £50,000

    Rental Income £141,000                                                      £141,000

    all costs other than Interest  £49,768                                   £49,768

    Total Interest for Year £57,801                                              £57,801

    Interest Deductible 50% £28,900                                          £28,900

    Tax Credit for 50% £5780 18/19                                          £5,780

    Total Tax Bill before credit £13,510                                 £27,725

    Tax credit                              £5,780                                   £5,780

    Tax Due                                £7,730                                   £21,945      

    The tax difference because you have a 50k income is £14,215           

    The main point to note is we are only half way through S24!

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I feel like a total failure looking at those figures, my salary is £25K and my rental income is about £10K, I must be at the bottom of the food chain

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    You have not failed you are successful. You were born 

    The rest is hype

    Be careful with whom you compare yourself if you are vulnerable to affluent people around you

    Compare yourself instead maybe to  those who have no job no food no shelter  and live in war torn countries

    Some people are inspired when they see those who are richer and it motivates them to do well

    Some people though feel deflated and feel a heavy weight on their shoulders

    Money can be a mirage  -

    Some of the poorest people are the  happiest

    Aim for happiness first - the rest will follow

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    Jonathan Clarke. http://www.buytoletmk.com

    Please don't ever think of yourself as a failure in life. You could never have been a bigger failure than me by the age of 50.  At the age of 40, I was £35,000 in debt to the family after losing my own house and five HMO's in 1990 when the interest rates escalated to17%. By the age of 50 and working in my uncle's care homes I was still in £35,000 debt with no personal property or BTL's and zero assets. My big break came when I borrowed £110,000 from my Uncle in the year 2000 to buy our own care home (effectively on 100% mortgage) which we sold in 2006 giving us enough money to repay my Uncle and get into property once more.

    Over the last 18 years, we have accumulated well over £4,000,000 of property assets comprised of a care home for the elderly, a big HMO and numerous BTL's. My passion at the age of 68 is to see how much more I can add to this before I die. I am driven by a sense of achievement, not for fast cars and fancy holidays but for progressive property acquisition. I know what it feels like at 50 to have worked hard for 30 years and still be in debt so now that I have been released from the chains of destitution and poverty I relish every minute of my latter-day fortunes.

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    Out of intrest are you expanding via a company or are you buying with low leverage in your own name

    DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Not a failure in any way! In fact 10K is only 2k short of my lean financial independence number that I am striving for so when I hit 10K I will count myself as well on the way to my first success milestone!!

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    If you break this down further, the profit here is £33.431 and a working landlord is paying over £21k on his BTL income and that’s only this year!  Can you imagine the tax bill in 2021?

    It's horrific if your income comes from outside BTL.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    i'm not so sure that is correct, I am a working landlord, when I do the maths, it works out I will be £700 per year better off in 2020, when S24 is fully implemented.

    I have posted the calculations on a previous thread somewhere.



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    I use professional landlord's software and I think it is right

    If I use the RLA calculator the figs tally for 2021 is around £30900 which is the total profit

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I use the RLA section 24 calculator

    if you google it you should find it

    DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.