2007-03-04 00:36:45 · 4 answers · asked by ADRIAN B 1 in Business & Finance ➔ Taxes ➔ United Kingdom
The net income is taxed at ordinary income tax rates. So if you have a property that you let out at 1,000 a month and you have expenses (mortgage interest, furnished lettings deduction, repairs etc) of 500 a month you have made a profit of 500 a month = 6,000. If you have a job paying, say, 25,000 the 6,000 will be taxed at 22%. If, however, your job pays (say) 40,000 you will pay tax at 40% on the 6,000.
2007-03-04 00:42:55 · answer #1 · answered by skip 6 · 0⤊ 0⤋
It depends on how much they earn from other things.
There is a 'heirarchy' of incomes, in which earnings from employment comes first, then rental income. That means that for employment income you will get your tax relief (the first £5035 [typical] you earn per year) then your starting rate (10% on the next £2150) then your basic rate (22% on income up to £33300), then anything above this is charged at 40%.
This means that if you have a job where you earn £38335 (top of basic rate band plus your personal allowance) or more then any rental income on top will all be charged at 40%. If you have a job that earns less than this, or no job, then part of your rental income will be charged at 10%, 22% or 40%.
Tell us numbers and then we could calculate it.
2007-03-04 00:49:08 · answer #2 · answered by Anonymous · 0⤊ 0⤋
22% on net rental income. This means after expenses.
2007-03-04 00:39:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It all depend on their tax bracket
2007-03-04 00:39:52 · answer #4 · answered by ? 6 · 0⤊ 0⤋