Student Finance and S24 Income?

Student Finance and S24 Income?

by Readers Question

Guest Author

9:58 AM, 26th October 2023, About 8 months ago 6

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Hello, my daughter and I are in a long-running dispute with Student Finance England regarding income assessment and Student Maintenance Loan. I am asking whether any other landlords have experienced this issue and possible solutions.

The issue is that they are taking our Gross S24 Income (artificially inflated rental income including finance costs) rather than the actual taxable income following marginal tax relief. They claim this is correct. We are marginal rate (20%) taxpayers and this calculation has a massive impact on student maintenance loan assessment. It’s causing financial difficulties for our daughter and will mean that our younger daughter will not be able to attend university next year.

I have explained to them in great detail the impact of S24 on the headline income figure. Also that the only reason for S24 is to not give higher taxpayers a financial advantage in buying property, not penalise students seeking a Maintenance loan.

Currently, we are going through the Appeals stages but have made no progress on how they are assessing income. I should say that dealing with SFE is very difficult as you cannot engage in a two-way email conversation and Customer Services are next to useless. They cannot even tell me what income figures are being used in their assessment.

Has anyone else had this issue or can give advice based on their experience?

Adrian


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Comments

Jerry stone

10:38 AM, 26th October 2023, About 8 months ago

Yep I got caught by this as well and had a massive payment.
It’s because the tax is charged and then returned as a refund.
I’d hadn’t thought about disputing it.
Interesting

JohnSnow

10:54 AM, 26th October 2023, About 8 months ago

I sympathize with you since s24 is the most unfair tax I’ve ever known.

It seems the government doesn’t want btl properties to be held in personal names.

Shame on them for implementing it retrospectively though. Sorry this doesn’t help your situation but I wish you the best of luck with your appeal.

Simon F

11:41 AM, 26th October 2023, About 8 months ago

Great example of how S24 is grossly unfair. Send details to your MP and to NRLA for their campaign work.

reader

14:17 PM, 26th October 2023, About 8 months ago

Dear Adrian,

I wondered how long before this question appeared on property118. I decided to reduce the burden of high interest student debt by funding them where necessary for eleven academic years!

The interaction of the S24 implications and the method used by Student Finance to calculate a parent landlords income is quite perverse. See The Education (Student Support) Regulations 2011 as amended. My view is unfortunately they seem to follow the same route that HMRC use to calculate your income tax. I might be quite mistaken but I thought at one point they used a different formulation that related to legitimate income and expenditure rather than the S24 route .

TheBiggerPicture

16:48 PM, 26th October 2023, About 8 months ago

Reply to the comment left by John at 26/10/2023 - 10:54
They should have provided a mechanism for landlords to transfer properties into a limited company without CGT and stamp duty. These two things can be prohibitive to getting properties out of personal names. So the agenda must have been to get more tax out of landlords, one way or another.

Adrian Alderton

12:48 PM, 27th October 2023, About 8 months ago

Thank you for all your replies which are very useful. I am in contact with my MP over this and will push it again plus seek NRLA advice. The bizarre consequence is that as we don't have much savings (due to a couple of nightmare years around covid - another story) we will have to sell properties (lower value in N East) to fund Uni. All these are occupied by families with young children many of which been tenants with us for years. Bonkers.

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