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Michael Koppel
Michael Koppel, Tax Consultant
Category: Tax
Satisfied Customers: 109
Experience:  Chartered Tax Adviser
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Hope you are doing well. I would like to know if there is

Customer Question

Hello. Hope you are doing well. I would like to know if there is any tax advantage in the UK of having a student loan? I have some savings I'm considering use to partially repay the debt and thus reduce interest payment. However, I would like to first understand the tax implications if any. Thanks for your help.
Submitted: 1 month ago.
Category: Tax
Expert:  Michael Koppel replied 1 month ago.

Hi

I am one of the tax experts on JustAnswer and can help you with your query.

There is no real tax advantage to a student loan - it is basically just a non-taxable thing, so there is no advantage or disadvantage.

Generally speaking though it makes sense where you have savings to continue earning interest on that money and don't 'overpay' when repaying the debt on your student loan as the interest you will reduce it by is less than the interest you can earn on your savings.

Customer: replied 1 month ago.
just to be sure does it means principal and interest payments on student loans are not tax deductible and there aren't any associated educational tax credits on that?
Expert:  Michael Koppel replied 1 month ago.

That is correct

Customer: replied 1 month ago.
Thanks for your answer
Customer: replied 1 month ago.
I'm just relocating permanently in the UK after studying here. I am wondering if there are any tax deductions I should be aware of
Customer: replied 1 month ago.
What would you recommend me to check to understand if there might be any tax relieve applicable to me?
Expert:  Michael Koppel replied 1 month ago.

If you are relocating permanently then there will not be any tax deductions available to you.

The only thing that may be applicable is you might be able to be classed as a non-domicile.

Where this is the case you can opt to be taxed on the remittance basis. This means that your overseas income is not taxable if you don't remit it to the UK. However you lose your entitlement to a UK personal allowance (unless your overseas income is less than £2,000).