Does Student Finance consider S24 relief in income assessments?

Same here SF would not listen to us as they said they get their figures from HMRC, called HMRC they did not want to listen and would not reconsider.

EG; net profit for tax purposes £50,000, less £50,000 mortgage interest true net figure = £0.00

However both student finance and HMRC would not listen !!

Hi Joanne, I’d be tempted to take the simple path and show your income as £16k – after all that’s what your actual taxable income surely is? Are there other boxes for R&M etc?? Gross rental income and rental profits are two very different animals, as we all know. But do what you feel is best…I’m no expert here!

Reply to the comment left by Neil P at 26/09/2024 – 10:22
Can’t do that as they go to HMRC direct and check the figures and of course HMRC confirm the higher figure as net profit !

Ah okay FOX30, thank you – please ignore my comment Joanne!

Mortgage payments, for quite a long time, can no longer be considered expenses. After all said and done it was an advantage which continued well after mortgage tax relief for one’s own home was abolished. I will not be very popular with other landlords but I can’t see why taxpayers should be helping pay for other people’s property purchases. I don’t think Neils advice is legal.

The statement from Student Finance gives a pretty clear answer and confirms their complete inability to understand the question – whilst seemingly believing they are answering a question where the other party is playing the imbecile.

Reply to the comment left by Yvonne Francis at 26/09/2024 – 11:13
Not a logical position.

Historically there was an ability to offset mortgage interest against income tax for an owner occupiers home – but there was also something that existed to counter that, ‘Imputed rent’. This was the monetary benefit attributed to living in your own home. It was also possible to claim property maintenance against tax for a taxpayers own home in the 1950s and 1960s I believe.

Over the years the Imputed rent aspect was dropped but in an era of increasing owner occupation the tax benefit of claiming mortgage interest was retained (becoming well known under the MIRAS arrangement). Ultimately that benefit was then removed.

It is simply not correct to say mortgage interest was not an expense on a property that was rented out and where the rental income was liable to tax prior to the introduction of Section 24. Comparing the tax treatment of Buy to let with residential is comparing apples with pears for the reason I explained above – the fact that owner occupiers, including myself, enjoyed a perk without any flip side from a tax perspective is not relevant.

Of course with a trading business both limited companies and sole traders can fully offset finance costs of commercial propert directly – it is yet another distinction specifically aimed at unincorporated landlords that they have different tax treatment from incorporated property landlords who of course can fully offset.

It was purely a political move by Osborne that brought about the change.