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  • Tax

    Tax Implications

    Hi Guys,

    Gosh, so exhausting trying to finish a refurb! Only odds and sods to do but workmen all busy etc. Anyway...

    Am hoping to list my London flat end of June.

    Will then be looking to get x 2 BTL mortgages on pretty nice 2-3 bed apartments in Glasgow.

    Anyone know a bit re the tax laws up there?

    Basically, I would expect to tart them up decoratively, but otherwise let unfurnished. I am and still will be a low-rate taxpayer re being effectively retired with only a private pension, hence the need to secure income from rentals.

    Broadly, it looks as though, once the mortgage and letting agent has been paid I would be left with approx £8-900 PCM for each flat. But I just don't know how much tax I will have to pay. I do need to get an accountant but would be grateful for any guidance in the interim. My pension will go down if I start to have additional income. I hope the flats/white goods etc won't need too much maintenance as the properties will be in good, smart nick, with new appliances.

    Will I be able to claim something for the cost of doing up/equipping/hiring painter etc?

    Can't claim mortgage tax relief any more?

    If I did gross £19,200 PA - how much do you think I'd lose in tax?

    Thanking you all in anticipation...Just that I've seen so many posts where people are saying the typical landlord might make £200 per property and it's got me worried I am missing something!

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    A couple for starters, LBTT is calculated differently to SDLT. If you will be resident in Scotland, Income Tax is slightly different.

    https://www.revenue.scot/land-buildings-...-and-bands

    https://www.gov.uk/scottish-rate-income-tax

    Tenancy regulations are also different.

    https://beta.gov.scot/policies/private-r...cy-reform/

    I have no knowledge of the Scottish PRS but I noticed these differences when looking at the Welsh PRS.

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    These links are very helpful, thank you Gary. Will get swotting!

    A friend of mine who lets one property says I should basically expect tax to take 40% of any 'profit'. Does this seem about right to you?

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    Tax is very dependent on your overall income and how you structure your investment. I am aiming for a modest income of around £20k, maybe a little more if things go well. It seems there are more tax allowances than I can use at this level so my tax will likely be 0%, I'm not yet clear though what % my accountancy fees will be.

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    Check out the possibility of BTL mortgages as you may well be surprised. Its getting more difficult and depends upon the LTV . depends upon how much you are putting down and your other income.

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    Yes, am worried about this re my age/income etc. Though when I sell I should be able to buy a property for me to live in temporarily without a mortgage, so hoping that will satisfy lenders

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