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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.
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.
"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....
I am afraid your right and I think it would also effect her working tax credits too
Probably a case of many being in denial.
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
What pension tax relief is impacted?
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.
The annual allowance is reduced if you earn more than £110k. I am pretty certain nothing happens at £59k
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
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!
Big shock on the way