How will the budget announcement affect you?
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Learn to earn more… 2015 Budget Announcement
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Transcript of How will the budget announcement affect you?
Learn to earn more…
2015 Budget Announcement
Budget Announcement
Withholding CGT
Mortgage Interest
Relief Cap
Corporate Tax
Increase SDLT
Develop your knowledge and turn your passion into profits.
Wear & Tear Allowance
Make more money & pay less tax on your property
portfolio
o Mortgage tax relief set to a maximum of 20% (from 2017)
o Jane is a high rate tax payer (employed)
o £12,000 incomeo £8,000 Mortgage interesto £4,500 repairs costso £1,000 property management fees
o (£1,500) loss per year (higher if repayment mortgage)
High rate tax payers – 40% / 45%
Develop your knowledge and turn your passion into profits.
Make more money & pay less tax on your property
portfolio
oJane is a high rate tax payer (employed)
o£12,000 incomeo£8,000 Mortgage interesto£4,500 repairs costso£1,000 property management fees
o(£1,500) loss per year o£4,000 add back 20% interest limito£2,500 taxable profit (taxed at 40%)o£1,000 tax to pay despite Jane making £1,500 loss
High rate tax payers – 40% / 45%
Develop your knowledge and turn your passion into profits.
Budget Announcement
Withholding CGT
Mortgage Interest
Relief Cap
Corporate Tax
Increase SDLT
Develop your knowledge and turn your passion into profits.
Wear & Tear Allowance
3% Additional SDLT
Develop your knowledge and turn your passion into profits.
3% Additional SDLT
Develop your knowledge and turn your passion into profits.
oHouse purchased above £40,000 must pay 3% SDLT
oHouse purchase at £150,000
o 2% SDLT for most peopleo 5% for people buying buy to lets
Budget Announcement
Withholding CGT
Mortgage Interest
Relief Cap
Corporate Tax
Increase SDLT
Develop your knowledge and turn your passion into profits.
Wear & Tear Allowance
10% wear & tear on furniture
oMust be fully furnished
o Beds o Furnitureo Curtainso White goodso Sofa, chairs, tableso Cabinets and cupboards
Removed from April 2
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Develop your knowledge and turn your passion into profits.
Example: 10% wear & tear on furnitureo£12,500 rental income
o(£8,000) mortgage interesto(£1,500) property management feeso(£2,200) Repair costs
o£800 profito(£1,250) 10% wear & Tear allowanceo£450 losso£0 tax
Develop your knowledge and turn your passion into profits.
Budget Announcement
Withholding CGT
Mortgage Interest
Relief Cap
Corporate Tax
Increase SDLT
Develop your knowledge and turn your passion into profits.
Wear & Tear Allowance
People with limited companies
o Corporation tax rate reduction to 18%
Develop your knowledge and turn your passion into profits.
People with limited companies
Now 2017 2020
20% 19% 18%
• Corporation tax rates
Develop your knowledge and turn your passion into profits.
People with limited companies
Now 2017 2020
Profits £100,000 £100,000 £100,000
Tax Rate 20% 19% 18%
Tax £20,000 £19,000 £18,000
o Example £100,000 profit (20% same as personal tax rate)
Develop your knowledge and turn your passion into profits.
Budget Announcement
Withholding CGT
Mortgage Interest
Relief Cap
Corporate Tax
Increase SDLT
Develop your knowledge and turn your passion into profits.
Wear & Tear Allowance
Withholding CGT
Develop your knowledge and turn your passion into profits.
Withholding CGT
Develop your knowledge and turn your passion into profits.
Tax remedy pills
Allowable costs + 3Rs
Develop your knowledge and turn your passion into profits.
