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Just speaking to a friend that he was earning just over £35k from his salaried job and has 2 investment BTL properties. Very low yield (in London) but was told by his accountant that because of the earning is based on turnover and not net profit, even if he is not getting much profit from his rental property the turn over has pushed him above the £50k threshold resulting in losing of his child benefit.
Due to the hassle and very low yield from the property investment and now losing child benefit, worsening the situation, it was enough reason for him to exit the property market.
Thanks for S24 taxing on turnover, those earning over £30k have to be aware of this.
Thanks for sharing this evidence. Collateral damage from S24 has been discussed on these threads:See - Section 24 - unreported dangers that may bite 440K landlords forced into higher tax bracketNew tax also affects lower income tax bracket
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Your friend can now enjoy the capital gain and HRMC the CGT.
Nanny state to keep everyone in their place and other reasons?
If this really was a London centric issue with FTB then why nationwide policy?
I can't and won't believe the politician's version of Why?
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Oddly doesn't affect tax credits though. see 5.6 here https://assets.publishing.service.gov.uk/government/https://uploads.propertytribes.com/system/https://uploads.propertytribes.com/attachment_data/file/684520/TC600_Notes_Getting_your_tax_credits_claim_form_right.pdf
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It's this sort of thing that reason makes me angry, and I'm a pretty chilled guy.
People take massive risks when they take on property and tenants. However, the risk to reward ratio has been destroyed with S24.
I was fearing up to start expanding my portfolio but I'm beginning to think better of it.
"Change is a prerequisite to longterm survival".
The establishment is rigged so that the rich stay very rich, and the poor get poorer.
When Osborne announced S24 I had a couple of sleepless nights
I went to see my account who did my tax return ect
o met with him and I quote you will not be effected by it as you pay 20%
i educated the account and proved to him how wrong he was
I belive a great number of Accoutants still don’t understand S24 and they are not given there customer the right info
there is going to be one big shock as you have found
I have met a number of landlords who just did not relise the true impact of S24.
Learn Change and Adapt ?????
Also spoken to some of my relatives investing in properties overseas and they were shocked at our tax treatment investing in property in the UK. Tax going in, running it and coming out, the government covered all taxable route and apparently will be intensifying it during autumn statement.
Entering/Purchasing- Extra SDLT
Running it- S24
Exiting/Selling- extra CGT / inheritancd tax
Just realised this may not be the right topic here and may need to open another one for discussion.
Come to think about it, the title is not even accurate, it's not collateral damage, it is intentional damage with S24.
I think today BTL is the highest tax investment you can fine
and it’s the most hands on
the rules and regs you need to know is a job in its self
with the prospect of low capital growth it’s not worth borrowing money to invest
much less taxing investments available in my opinion
I suspect the government and HMRC are helping the banks get the tracker mortgages repaid. They made a big error offering mortgages that track the base rate with no limit how low they can go. The are losing millions on these mortgages. The West Brom tried to wriggle out of the mortgages and once that failed the gloves came off.