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  • Tax

    I'm a 20% tax payer so S24 has no effect?

    I received an email yesterday from a Lady who was annoyed with my comments about S24 and that I was running the Business Down and I was scaremongering

    The email was quite blunt

    I made contact with the Author and asked if she could phone me so I could chat this through

    The Author did ring me and again was quite firm with her views

    After the initial conversation ended and she realised I was not a horrible person we  stated looking into her personal situation

    She had purchased a number of BTL properties when she was married (Now Divorced ) and has two children under the age of 16

    She works part time  and she claims working tax credits she is a Basic Rate Tax Payer

    and this was the reason she was up set with my views on BTL

    I asked her for her figs and her yields on her BTL

    She is quite highly leveraged and her yields are under 5%

    I did a quick assessment on her situation

    I gave her the news that S24 would push her into 40% tax and the profits ????? would stay the same as now but she will pay more Tax

    She said No No you're wrong ??? My accountant has told me If I am a Basic rate Tax Payer S24 is not an issue

    She is not a happy person Her tax rises and she will brake even with her BTL investment in a very short time

    If Tax advisors /Accountants can not get this right at this stage there is something wrong

    Tick Tock  the clock is broken but I will still tell the time for the folk that will listen to facts.

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    Learn Change and Adapt ?????

    "My accountant has told me If I am a Basic rate Tax Payer S24 is not an issue"

    the accountant is right - however it seems that she will no longer be a basic tax payer....

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    I am afraid your right  and I think it would also effect her working tax credits too

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    Learn Change and Adapt ?????


    Probably a case of many being in denial.

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    There are so many S24 LL  that simply don't understand  that their tax bills will rise with the same income levels.

    Plus losing out on other tax reliefs like pension and child tax credits  etc

    Accountants seem to lack understanding about S24

    This poor lady you have been able to give definitive advice to must as come as quite a shock to her

    There might be many LL  like her that have been given  duff advice by their accountants!

    It is unfortunate for these LL that they won't be able to receive correct opinion from you.

    I bet when the larger tax bills start  landing on the doormat these LL  will be onto their accountants querying what the ###k is going on!!!

    Be too late then

    Many of these S24 LL  WILL have to subsidise  the tax bill with other income or sell up.

    I think this recent experience  of yours is just the tip of the iceberg  and just confirms  everything that you have conjectured

    Many S24 LL  are going  to be faced with shocking penal financial  realisations

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    What pension tax relief is impacted?

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    Apparently  if income exceeds £50000 then pension reliefs are reduced

    Someone on here will know the exact circumstances

    I don't and am not interested  as I have no pension  contributions  to be concerned with.

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    The annual allowance is reduced if you earn more than £110k. I am pretty certain nothing happens at £59k

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    I think Paul means when your on a pension you may get pension credit

    With section 24 inflating earnings it may well mean that some Landlords who are on the state pension will not receive pension credit 

    I know when I get my state pension it will all go to pay my s24 tax

    In with one hand out with the other lol

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    Learn Change and Adapt ?????


    I know so many people who are blissfully unaware of this DL. "Property is just a bit on the side and won't affect me" Lol!

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    Big shock on the way

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    Learn Change and Adapt ?????