If I bought a property for my daughter and put it in her name and rented it out for less than £10600/annum no tax would be payable as it would fall within her personal allowance. Would she still have to fill out an annual tax return form? If I bought the same house in my name and rented it out the rental income would be subject to tax, the amount I am not sure of in the future as by 2020 landlords will not be able to offset mortgage interest against rental income fully.
Under the current system e.g If the rental income is 12k/annum, and the mortgage interest is £300/month and I currently earn £35/annum PAYE, not taking into account any other expenses I think the tax would be as follows:
12,000 - 3600 = 8400
20% tax would be payable on 7000 (35,000 + 7000 = 42000 - lower rate tax) = 1400
40% tax would be payable on 8400 - 7000 = 1400: = 560
Total tax payable = 1960 ? correct
Does anybody know how the above example would work out regarding tax under the new system by 2020? Any help appreciated
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