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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 14483
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I want to buy a property for a buy to let. My income is my

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Hi, I want to buy a property for a buy to let. My income is my private pension which is £26,000 per annum before tax of 20%. In 18 months I will get my State pension added on. Can you tell me if this will mean I need to pay a higher rate of tax? The other question is if I buy this property in the name of a limited company what will that mean I will have to pay in tax?
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Customer: umm didn’t quite understand that answer
Assistant: Which tax year is this for?
Customer: I haven’t bought the property yet. The pension is for 2017 - 2018
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Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

First you cannot buy a property through a limited company as there has to be a business/trade occurring in which the property is used within the business so it will have to be just rental income

Can you advise

1) how much your state pension will be each year and

2) How much net income you expect to make each month from the rental property

I can then work out an estimated tax position for you

Thanks

Sam

Customer: replied 4 days ago.
26,000 my pension and hope to get £1300 per month from rental. I already have a limited company because I was involved in HMO property a while back so could you please tell me about tax in the circumstances of a buy to let property thanks

Hi

Please advsie how much your state pension will be

AN HMO is a business due to the way it is run but a normal buy to let is not so its just Schedule A rental income so its added to the pension and state pension and taxed under the income tax rules

So I can advsie the tax position once you let me know what the state pension figure will be annually

Thanks

Sam

Customer: replied 4 days ago.
Probably about £150 per week so annually approx £10,000 I think

Hi

Thanks for that

Then with a pension of £26000 and state pension of £10000 totaling £36000 then any rental income (net) in excess of £10350 will be at 40% so if you net £1300 a month which totals £15600 then the first £10350 will be charged at 20% and any additional amount (approx £5250) will be charged at 40%

And of course any money you take out of your limited company also is then charged at the higher rates (either tax or dividend rate)

Thanks

Sam

Customer: replied 4 days ago.
Thanks Sam

Hi

You are very welcome

Please do take the time to rate me for the level of service I have provided

Thanks

Sam

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