ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 Well it's certainly something to aim for. My plan for retirement is based on a lottery win. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted October 25, 2016 Share Posted October 25, 2016 Oh I fully admit to being selfish about it. I like nice holidays at couples hotels and I like being able to do what I want, when I want. The magic number is basically your annual outgoings (that you would have at retirement rather than what you have now) times 25. So you assume a 4% withdrawal rate basically. 3.5% to be conservative, although 4% has been the figure that would have worked for someone retiring in all but 2 of the last 40 years. In most cases 4% is enough for you to end up actually growing your pot during retirement. If my "pot" is tied up in property for now and I want to sell it when I retire.... as things stand, would I be bitten on the arse by any chunk of that going on tax or fees? Combined value isn't currently above £200k. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 Get away, Belfast Mike Ashley must only have 10 years work left to do?? Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 If my "pot" is tied up in property for now and I want to sell it when I retire.... as things stand, would I be bitten on the arse by any chunk of that going on tax or fees? Combined value isn't currently above £200k. You'll likely be hit with capital gains tax but there are ways of putting it into a pension to offset the tax. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 Aye, honestly HF I don't know enough about current capital gains rules to tell you one way or the other. Try monevator.com which is a UK based blog that covers a lot of this stuff. They might well have a posting that would answer your question. Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 Get away, Belfast Mike Ashley must only have 10 years work left to do?? I have expensive tastes in coke, whores and diamond encrusted grills. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted October 25, 2016 Share Posted October 25, 2016 You'll likely be hit with capital gains tax but there are ways of putting it into a pension to offset the tax. Champion, and reading up on Capital gains it sounds like even paying it in full, it would only be on the price increase, not on the full sale price, So it won't be too bad. Another question though. How come I'm making a loss on my property (Mortgage > rental income) but I'm paying tax on almost all of my rental income as only the interest on the mortgage is deductable? sounds like I'll be taxed twice on the same house purchase. Is that the scam they run? Or am I doing it wrong? Link to comment Share on other sites More sharing options...
Happy Face 29 Posted October 25, 2016 Share Posted October 25, 2016 Aye, honestly HF I don't know enough about current capital gains rules to tell you one way or the other. Try monevator.com which is a UK based blog that covers a lot of this stuff. They might well have a posting that would answer your question. Cheers Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 How come I'm making a loss on my property (Mortgage > rental income) but I'm paying tax on almost all of my rental income as only the interest on the mortgage is deductable? sounds like I'll be taxed twice on the same house purchase. Is that the scam they run? Or am I doing it wrong? That sounds about right. Only the interest is treated as an expense. The capital is basically what you're paying so that at the end you own the asset outright, there's no relief on that. You aren't being taxed twice. The rental income and CGT (which as you rightly say is only charged on your gain) are two separate sources of income. Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 Fucking left-wing property magnates coming on here complaining about paying too much tax. The hypocrisy! Link to comment Share on other sites More sharing options...
Happy Face 29 Posted October 25, 2016 Share Posted October 25, 2016 Fucking left-wing property magnates coming on here complaining about paying too much tax. The hypocrisy! I provide social housing at a personal loss because the government won't Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 If it's furnished you can claim a 10% wear and tear allowance iirc, which you offset against your rental income. Link to comment Share on other sites More sharing options...
Rayvin 4964 Posted October 25, 2016 Share Posted October 25, 2016 I provide social housing at a personal loss because the government won't HF truly is incorruptible. Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 If it's furnished you can claim a 10% wear and tear allowance iirc, which you offset against your rental income. I think that was done away with recently. It's now just based on what you actually spend replacing/repairing furniture. Link to comment Share on other sites More sharing options...
Happy Face 29 Posted October 25, 2016 Share Posted October 25, 2016 If it's furnished you can claim a 10% wear and tear allowance iirc, which you offset against your rental income. Ta, but unfurnished. Some interesting stuff on that site. Me and the wife get a £10k a year capital gain allowance each. I think that any time we can get that much equity out of it we need to remortgage and move the cash into an ISA. Then when we retire, the sale of the property should pay off the mortgage and we should keep what is in the ISA. I've just been paying off as much as I can and thinking I would deal with the profit when it comes to that time, but it looks like I'll have to be much more proactive in siphoning off the equity I create when paying the mortgage. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 It's still there on the HMRC site, but it's only for fully furnished properties and if you claim it then you can't claim the actual cost of repairing stuff as well. Which makes sense. So I guess you just pick the higher of the two numbers for the relevant tax year and claim that. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 Ta, but unfurnished. Some interesting stuff on that site. Me and the wife get a £10k a year capital gain allowance each. I think that any time we can get that much equity out of it we need to remortgage and move the cash into an ISA. Then when we retire, the sale of the property should pay off the mortgage and we should keep what is in the ISA. I've just been paying off as much as I can and thinking I would deal with the profit when it comes to that time, but it looks like I'll have to be much more proactive in siphoning off the equity I create when paying the mortgage. Ah right. Is that what they recommend on that monevator site? Makes sense I suppose, but aye it's exactly the sort of thing your average person would miss. I didn't realise that, if you're a higher rate tax payer, you can lob any money you've got in ISAs into a SIPP (pension) as you approach retirement and claim 40% tax relief on it. So basically bump up the value of your retirement pot by 40%, then withdraw 25% of it tax free an only pay 20% tax on the rest in retirement (assuming you'll only be a basic rate tax payer in retirement). Which seems mental. Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 Either HMRC website is out of date or I'm wrong. And I'm not wrong. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 [emoji38] Last updated September 2016. Link to comment Share on other sites More sharing options...
Dr Gloom 19826 Posted October 25, 2016 Share Posted October 25, 2016 Narita is also less busy than Gatwick. Though I do take your point. I'm just bored and difficult this afternoon. heathrow is also a major pain in the arse to fly into. congestion problems mean most flights have to fly in holding pattern circles for 20 minutes before a gate can be allocated. i'm sure an extra runway won't exacerbate the problem. Link to comment Share on other sites More sharing options...
Renton 17795 Posted October 25, 2016 Share Posted October 25, 2016 I've not flown anywhere in 4 years. I can count my hands the number of international return flights I've taken in my life. That's irrelevant though. i don't believe in people sorting through their own recycling or choosing to buy more economic cars if they want to any more than I believe individuals should collectively choose not to fly where the government gives them that choice. All environmentally harmful activity should be inhibited by government policy. Not exacerbated by giving millions of people the option to understand the implication of what they're doing.. So, to interrupt the conversation the champagne socialists were having about their rental properties and pension funds for a moment, was this a serious post? Are you abdicating individual responsibility for the environment? Do you honestly believe that any government could get voted in on a manifesto that stopped air travel for the masses? Not going to happen is it, which is very convenient. Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 mrmoneymustache.com is a decent blog for anyone interested in this stuff. Retired in his early thirties to start a family. His wife retired at the same time. This post is about the basic maths behind jacking it in early: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ Link to comment Share on other sites More sharing options...
Renton 17795 Posted October 25, 2016 Share Posted October 25, 2016 heathrow is also a major pain in the arse to fly into. congestion problems mean most flights have to fly in holding pattern circles for 20 minutes before a gate can be allocated. i'm sure an extra runway won't exacerbate the problem. Eh? The whole point of it is to release capacity, of course it's not going to exacerbate the problem. Honestly Gloomy, you aren't half talking some shite here, do you not think all of this gas not been thought about in massive depth after millions of hours of consultation? Link to comment Share on other sites More sharing options...
Gemmill 34503 Posted October 25, 2016 Share Posted October 25, 2016 So, to interrupt the conversation the champagne socialists were having about their rental properties and pension funds for a moment, was this a serious post? Are you abdicating individual responsibility for the environment? Do you honestly believe that any government could get voted in on a manifesto that stopped air travel for the masses? Not going to happen is it, which is very convenient.I've told you, I'm fully right wing these days. Capitalism all the way until I die. Me, you and Tony Blair. We're all in this together. Link to comment Share on other sites More sharing options...
ewerk 26390 Posted October 25, 2016 Share Posted October 25, 2016 [emoji38] Last updated September 2016. Legislation will be introduced in Finance Bill 2016 to repeal the Wear and Tear Allowance provisions and make new provision for a deduction for the replacement of furnishings. The deduction will be available in calculating the profits of a property business which includes a dwelling-house. The deduction is available for capital expenditure on furniture, furnishings, appliances (including white goods) and kitchenware, where the expenditure is on a replacement item provided for use in the dwelling. The amount of the deduction is: the cost of the new replacement item, limited to the cost of an equivalent item if it represents an improvement on the old item (beyond the reasonable modern equivalent) plus the incidental costs of disposing of the old item or acquiring the replacement less any amounts received on disposal of the old item Link to comment Share on other sites More sharing options...
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