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Where Taxpayers and Advisers Meet

Buy to let tax relief 20% Taxpayer / salary exchange

nicko41
Posts:5
Joined:Tue Jan 26, 2016 11:02 am
Buy to let tax relief 20% Taxpayer / salary exchange

Postby nicko41 » Tue May 31, 2022 3:33 pm

My current salary around presently £50k p.a (after around £10k salary exchange for a pension)

Recently I purchased a BTL property, the rent is £13k year and I have £3k year mortgage expenses, ie roughly £10k net

If I asked my employer to reduced my salary to £40k p.a (£20k salary exchange), would I be allowed to claim the mortgage interest as a permitted expense?

Any advice appreciated

D&C
Posts:154
Joined:Mon Nov 25, 2019 11:35 pm

Re: Buy to let tax relief 20% Taxpayer / salary exchange

Postby D&C » Tue May 31, 2022 4:16 pm

It wouldn't matter if your taxable salary was 40p, £40k or £400k.

You cannot claim "mortgage expenses" against rental income.

You would probably be eligible to claim a tax credit in relation to any qualifying element of the expenses.

But that wouldn't alter the fact that you have £13k profit (subject to any expenses that are deductable).

I suspect you are getting confused somewhere along the line and probably mean something completely different. Maybe enlisting the services of an accountant would be a sensible move?

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: Buy to let tax relief 20% Taxpayer / salary exchange

Postby Jholm » Wed Jun 01, 2022 8:56 am

Subject to a few potential but seemingly unlikely restrictions, you are going to get 20% relief on the mortgage interest element, whether you are in basic rate or higher rate.


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