BTL Tax rules post 2020 - am i on the right track?

[caymanbill]

Hello Finance gurus. I'm in the process of trying to figure out if a new BTL is going to be worth while given the changes in tax which are coming.
I've attempted a back of a fag packet calculation below.

Does this calculation look "roughly" correct or am i on the complete wrong track here?

The assumption is that post 2020 my total earnings will push me into the higher tax band.

Would appreciate your collective views!

[caymanbill]

Cheers for the feedback both! email sent

[caymanbill]

Ozzie Osmond said:

The more I look at it the more fundamentally wrong those figures become. What worries me most isn't so much that the OP has got it wrong but that other people are jumping up and saying it's correct!

Rent 950
less Mortgage 683
less service charge 86
less agent 76
less VAT on agent 15

net cash received = 90

So in a full year 12 x 90 = 1,080 net cash received

And that's BEFORE tax!

......or have I lost the plot?

No, you haven't lost the plot. Just realised that i wasn't including my tax deductible items (service charge & agents fees) from my final calculation. Doh.

[caymanbill]

PurpleMoonlight said:

Why is the tax assessment changing from all at 20% to all at 40%?

If you have some scope for 20% now will you not still have some come 2020?

I'm sat on the edge of the 20/40% band at the moment, so the fact that the full rental amount will be taxable will push me right over into the higher band.