How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask Sam Your Own Question
Sam, Accountant
Category: Tax
Satisfied Customers: 15604
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Type Your Tax Question Here...
Sam is online now

Have a rental property that cost's me £5318 a year for a

This answer was rated:

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 7 months 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 7 months ago.
you still there?

Yes - im still here I need figures please

Thanks Sam

Customer: replied 7 months ago.
PAYE 115

And tax paid ?

Any savings ?

And post tax pension contributions

Company car ? Medical benefit from employer ?

Customer: replied 7 months ago.
Customer: replied 7 months ago.
Interest on savings was 118 Net, no additional pension contributions
Customer: replied 7 months ago.
Medical £330
Not car
Customer: replied 7 months 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 7 months 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 other Tax Specialists are ready to help you
Customer: replied 7 months ago.
Thanks , How do i finish?

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