Student loan rebate

[eivo14]

Sorry if this is in the wrong forum.

In March 2016 I overpaid my student loan by a large amount due to a bonus (i.e. I had X left to pay and I ended up paying X+Y). I then filled out my self-assessment tax return for 2015-2016, and the SLC have repaid to my bank account the amount that I overpaid my student loan by.

However, my question is, doesn't student loan come out of my pre-tax income? If so, do I not owe tax on the amount that I have received back from the SLC? How much tax would I pay on this, and how would I go about paying or declaring it?

Cheers for any help

[Lambs]

E,

You are right that the Student Loan Repayment is assessed based on pre-tax income. But so is your tax liability. Or, to address your concerns more directly, tax is calculated/charged on your gross income, i.e., before your Student Loan Repayment is deducted. Therefore, if your Loan Repayment was too much, too little, or just right, your tax is the same. So you will not need to recalculate your tax because of the rebate.

Hope this helps,

Lambs

[eivo14]

E,

You are right that the Student Loan Repayment is assessed based on pre-tax income. But so is your tax liability. Or, to address your concerns more directly, tax is calculated/charged on your gross income, i.e., before your Student Loan Repayment is deducted. Therefore, if your Loan Repayment was too much, too little, or just right, your tax is the same. So you will not need to recalculate your tax because of the rebate.

Hope this helps,

Lambs

Thanks for your response. So basically you are saying that the amount of student loan to be paid is based on gross income, but the amount that is paid comes out of my net income?

[Lambs]

Hi yes that is correct.

[eivo14]

Hi yes that is correct.

Well that's great news! Thanks for your help again.