High earners witness income tax rises of up to 50% of their earnings

Say ‘property investment’ and the Budget report in the same sentence, and you’ll probably wonder how the two are related. Yet the truth of the matter is the decisions made by the Government during this Budget report have more of an influence on your property investments than you actually think.

The link? The impact of their tax changes to your rental properties taxable profits.

Before the beginning of every new tax year, the House of Commons comes together to discuss the UK’s altering economy.

If the economy is good, your income tax remains steady, but if the economy is in decline – as is the case in the current climate – then those on a higher income could face huge income tax increases.

Take the government’s most recent Budget report. Here it was proposed that anyone earning more than £150,000 a year should have to pay a new top tax rate of 50%, whilst those on £100,000 and above, would witness their personal tax allowances drop by £1 for every £2 they earned.

Under this new Budget - the more you earn, the more you could potentially lose.

How can the Budget affect you?

P810 forms… filling in the land and property pages of your Self Assessment form… being aware of your tax liabilities and what is expected of you, can have a huge impact upon the return on investment you make on your properties. Especially in regards to the amount of taxes you have to pay.

For the majority of property investors, the sum you pay to your Tax Office is based on the combined value of your annual income. However if your income is solely formed on the profits you make from your rental properties, then the following information is applicable:

• Taxable income less than £2,500 – if you are employed or getting a pension, you can fill in a P810 form to help adjust your PAYE tax code to accommodate your property
• Taxable income above £2,500- £15,000 – need to fill in a Self Assessment form
• Taxable income for property above £15,000 – must declare additional information on the land and property pages of the full Self Assessment form

Turn the Budget to your investment advantage

At Property Mentor we understand the impact these income tax changes can have on your profits and ultimately the size of your property portfolio. However, taking the step to transform property into a profitable avenue for your future is still within your reach.

Working alongside our Property Mentor Finance Team, our team of financial experts can give you guidance and insight you need to help you find the best property deals; the strongest investments and more importantly, assist you in understanding all your properties taxable charges.

We want you to succeed, and our free 2 hour taster session can give you this assistance.

During these 2 short hours, we will show you how to:

• Invest using 8 unique investment strategies
• Invest using little, if any, of your own money
• Make some of your income 100% tax free.

  So open your property portfolio to all the possibilities the property market has got to offer, and let the Budget work to your advantage.

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