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Sam, Accountant
Category: Tax
Satisfied Customers: 14970
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Have a rental property that cost's me £5318 a year for a

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Hi, Hi have a rental property that cost's me £5318 a year for a mortgage. I receive £6900 as an rental income but when i do my self essessment I pay 6128 in tax ? Which is all except the interest deduction on the mortgage. Why do i do pay 40% of £6128 amout?
JA: Which tax year is the deduction for?
Customer: 19/19 18
JA: Anything else you want the Accountant to know before I connect you?
Customer: know no

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly


Is it a buy to let mortgage as you can only claim the interest element of the mortgage and now only 50%

What other income do you have ? as its added to all income to establish the tax rate due

So other incomes and tax paid including company benefits and savings that are listed in your tax return and details of any pension payments made post tax or gift aid

I can then advise further







Customer: replied 10 days ago.
Just my PAYE income
Is a buy to let yes repayment mortgage. It would therefore be cheaper for me to leave the property empty and just pay the mortgage!
Customer: replied 10 days ago.
you still there?

Yes - im still here I need figures please


Thanks Sam

Customer: replied 10 days ago.
PAYE 115

And tax paid ?

Any savings ?

And post tax pension contributions

Company car ? Medical benefit from employer ?

Customer: replied 10 days ago.
Customer: replied 10 days ago.
Interest on savings was 118 Net, no additional pension contributions
Customer: replied 10 days ago.
Medical £330
Not car
Customer: replied 10 days ago.

Hi I will make the calculation for you now


Thanks Sam

Ho so £115000 income plus £330 medical and then net rental income £6900- £2659 as only 50% of interest paid due leaving £1969 so £115330 plus £1969 = £117299

Then as your income is in excess of £100,000 your personal allowances are restricted by £1 for every £2 in excess so full personal allowances £11850 and you are £17299 excess over £100,000 which means a reduction of £8650 from the full allowances leaving £3200

savings ignored as below savings rate exemption

So then £3220 tax free then

£34501 at 20% = £6990.00 leaving the balance of income (£117299 - £3220 - £34501 = £79578)

so £79578 x 40% = £31831.20

So total tax due £41862.30 less paid £35356 - so tax due £6506.40 by my calculations


we are about £400 out from each other due to the half interest restrictions and some of the personal allowance restrictions






Customer: replied 10 days ago.
Hi, I forgot to mention a 364 pound washing machine , so that would be the 400 diff. So in theory then it is better for me to just pay the mortgage and collect rent ?

That would adjust the tax bill by £160 only you can decide that as you lose personal allowances due to your higher level or earnings in excess of £100,000 which do advise HMRC so they can adjust this tax years tax code.

The rent position costs you £787.60 and next year will cost you £1000 approx so you are in pocket regarding the rental position its your tax code giving your full personal allowances that has cost you this year






Sam and 2 other Tax Specialists are ready to help you
Customer: replied 10 days ago.
Thanks , How do i finish?

All done by pressing accept or having rated me - thank you and have a great day - Sam