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Not necessarily. Many of us will just pay more into our pensions.
I use pensions its a good help with S24
40% tax relief is worth having in anyone's money
Learn Change and Adapt ?????
I was thinking more from an income perspective
Yes you could siphon off cash into pensions but that means a decrease in income which I would think is being used for lifestyle now.
Yes you can delay gratification now to receive it years ahead.
But the result of S24 will be less income to spend now.
Putting it in a pension yes of course is a better thing to do than having it taxed away now.
You'll just have to get used to income as a BRT which could mean not much if mortgage interest comprises a large part of that BRT income
It's easier of you are over 55 because you can get access to the tax free bit of your pension if necessary.
I have been having this same argument with a landlord friend of mine. He cannot accept that he will be dragged into the 40% tax bracket. He knows that that he will not be able to offset his mortgage interest payments but honestly believes that it will not be seen as income. It does not matter how I try to explain it to him he remains in denial.
I implemented a survival plan last year, without a massive increase in interest rates I will survive, with one I will be sunk, paying more tax than I am earning!
From what I can see there is a lack of knowledge with accountants and Landlords
they all use professional Accountants software and I would imagine when they input the figs there will be some surprises
It would be interesting as a case history if perhaps your LL friend contacted DL
To then receive a thorough explanation
Then for that LL to post on here explaining his journey from ignorance to knowledge
It would be very interesting to hear his perspectives from before DL to post DL
I'm sure DL wouldn't mind a bit of a conflab with your LL friend.
I'm not surprised your LL friend refuses to accept the full premise of S24
It defies belief so cunningly has it been created.
As has been suggested even accountants don't fully get it.
You have to hand it to Osborne
It was a very devious bit of tax legislation
I think I'm reasonably smart is convinced myself that I'd be ok with 20% tax bracket . I pay £150k of debt payments in personal names . My smart wife pointed out my error I wasn't too happy for few days . It'll cost me £35kish once all the allowance taken away plus if when rates go up further so will this . We have a plan but still I think for a few years we will be at 30% left 70% tax . That's £30k left in my pocket for every £100k I earn . We are selling plus selling to our ltd company whilst buying higher yielding HMOs into our ltd company hoping preying that the budget doesn't kick us more in the guts .
It is nothing more than legalised theft.
For no more income you lose £35000 to the taxman.
All the hard work and effort you have put into creating quality homes for those who could never manage to buy.
You are now to be taxed for having the temerity to do so.
And all because you did it in your own name!!
Its like a burglar nicking money out of your safe!
It is Paul my missus said " imagine taxing flour in bread making not being a tax deductible ? " . I thought she put that in context . It's a dick Turpin tax sick . It's not exactly motivated me although I guess we all now have to " kick on " and make up the net profit to stay the same its Bentley Gt money that puts it into context . Or retirement money so in theory we now have to work an extra few years . I'm very lucky I own a higher yielding portfolio plus HMOs and a letting company plus we are developing now but it still sticks in my throat .
-Wednesday hopefully the Gov won't introduce s24 to ltd companies that would show us they really gunning to wipe us all out . I'm not lying down though .