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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5029
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am currently on a company pension of 25.500 per annum which

Resolved Question:

I am currently on a company pension of 25.500 per annum which is taxed at the standard rate. I also rent out my property whilst I travel abroad. The rental income from my property is £11,500 per annum. My agents fees are £1,422 and mortgage repayments are £5,850 , cumulative £7,272 which gives me an overall profit of £4228. Will I be expected to pay income. Will i now be charged tax at a higher band ?
Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.
If your total income i.e. pension and net profit from property income falls within the basic rate band then you would pay income tax at the basic rate of 20%. The threshold for this tax year 2014-15 is
Basic rate tax 20% on taxable income £0-£31,865
Higher rate tax 40% on taxable income £31,866-£150,000.
Based on information provided, your income would be taxed at 20%.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 3 years ago.

thank you for your prompt reply. I forgot to mention that I also have to claim for Landlord Property Insurance (approx 300 pa) and Mortgage Interest payments of 1,752 pa. Would these costs also reduce my profit ?

Thank you - I will definitely recommend you

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your prompt reply.
As far as mortgage payments are concerned, only the interest element is deductible as an allowable expense.
Landlord property insurance charge, agent's fees, any costs associated with repairs and maintenance, accountant's fee for preparing rental income accounts accounts are all allowable expenses.
I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Best wishes.