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TOPIC: Impact on Child Maintenance calculation of investment property tax rules

Impact on Child Maintenance calculation of investment property tax rules 1 month 1 week ago #110193

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Well done on the progress so far - and sounds like you've got a good MP.

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Impact on Child Maintenance calculation of investment property tax rules 1 month 1 week ago #110196

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Correcting my previous post 110191 :-
"... and he got back a not very helpful reply which essentially simply stated that CM calculations are based on the NON-PAYING parent's gross income and that there were no plans to amend this in the light of any HMRC changes."
should say -
"... and he got back a not very helpful reply which essentially simply stated that CM calculations are based on the PAYING parent's gross income and that there were no plans to amend this in the light of any HMRC changes.

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Impact on Child Maintenance calculation of investment property tax rules 1 month 1 week ago #110210

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Will99 wrote: Correcting my previous post 110191 :-
"... and he got back a not very helpful reply which essentially simply stated that CM calculations are based on the NON-PAYING parent's gross income and that there were no plans to amend this in the light of any HMRC changes."
should say -
"... and he got back a not very helpful reply which essentially simply stated that CM calculations are based on the PAYING parent's gross income and that there were no plans to amend this in the light of any HMRC changes.


I've amended your previous post to correct this.

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Impact on Child Maintenance calculation of investment property tax rules 3 weeks 4 days ago #110452

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OP here. Just to give a small update - my MP did get a reply back from the DWP SoS's office It didn't particularly deal with the core issue as for one thing the initial question had to be completely neutral and almost 'introductory' in nature. So I am hopeful that this is the beginning of a conversation at least, and my MP indicates so.

The difficulty is that the DWP/CMS have faith in their calculation, and consider the HMRC's gross income figure as beyond question - why should they care how that figure is made up ? The HMRC have faith in their changes to increase the gross taxable income of landlords - after all it has done exactly what it was intended to do.
The issue of 'unfairness' is not obvious and needs more than a letter to highlight.
Interestingly, the SOS's reply did mention mortgage costs - in a list of landlord's expenses that are deductible, so maybe they just need a bit of an update on that !
Anyway here's hoping ...

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Impact on Child Maintenance calculation of investment property tax rules 3 weeks 4 days ago #110458

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Will99 wrote: Interestingly, the SOS's reply did mention mortgage costs - in a list of landlord's expenses that are deductible, so maybe they just need a bit of an update on that !
Anyway here's hoping ...


I thought mortgage costs were still deductible, but only at 20% tax rate, or have I got that wrong? Sounds like your MP is willing to stay with it, so that's good.

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Impact on Child Maintenance calculation of investment property tax rules 3 weeks 1 day ago #110503

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@actd "I thought mortgage costs were still deductible, but only at 20% tax rate, or have I got that wrong? Sounds like your MP is willing to stay with it, so that's good."

Landlord's mortgage costs are no longer deductible at all as of 2020/21 year. Their full amount forms part of your gross taxable income that the CMS uses to calculate CM amount, and that the HMRC uses to calculate your tax bill. However the taxpayer then gets relief on that income tax bill of 20% of those mortgage costs.
So for income tax on such costs, the landlord pays at his marginal rate but gets tax relief at basic rate.
For CM, the full mortgage costs are included in the gross income figure used in the calculation.

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