This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Calculating total income

mole
Posts:3
Joined:Fri Aug 28, 2015 10:40 am
Calculating total income

Postby mole » Fri Aug 28, 2015 10:49 am

Hi - I have a question around calculating my total income to see if you fall above/below the £100k tax barrier.

If you income is say £50k and you receive say £45k in dividends then your total income is £95k.

Added to that is the 11% tax credits for the dividends which is £4955 taking the amount up to £99 955. Just below the £100k.

Now, if you also took into account rental income, I presume that just gets added to that total amount, meaning you would go over £100k....is that still the case if the property has actually made a loss this year, due to agency fee's, repairs etc.

I realise if the property makes a loss I won't pay tax on it, but does it get added to the total income amount, therefore pushing the amount over £100k and eating into the personal allowance?

Hope that makes sense...it does in my head!

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: Calculating total income

Postby section 44 » Fri Aug 28, 2015 12:55 pm

Now, if you also took into account rental income, I presume that just gets added to that total amount, meaning you would go over £100k....is that still the case if the property has actually made a loss this year, due to agency fee's, repairs etc. I realise if the property makes a loss I won't pay tax on it, but does it get added to the total income amount, therefore pushing the amount over £100k and eating into the personal allowance?
You only take into account profits of your property letting business.

mole
Posts:3
Joined:Fri Aug 28, 2015 10:40 am

Re: Calculating total income

Postby mole » Fri Aug 28, 2015 1:03 pm

Thanks for the response, so effectively because the rental property made a loss this year I could earn receive £99 999 via salary and dividends (including 11% tax credits) and not lose any personal allowance!

Thanks

taxguru
Posts:36
Joined:Sun Jun 10, 2012 12:11 pm
Contact:

Re: Calculating total income

Postby taxguru » Sun Aug 30, 2015 11:27 am

Based on what you have said so far, yes.
Otherwise, you start losing the personal allowance once your 'adjusted net income (s.58 ITA/07) exceeds £100,000 (s.35 ITA/07)
What is shared above is information only and not advice in any form


Return to “Income Tax”