Renting out my house...

pchelpman · 9 March 2006 at 11:49AM

WHA ... you are, of course, completely right and it was in my mind. On reflection maybe I should have at least made mention of this (even if at the risk of confusing the issues further).

However, my mind was on two concerns here.

Firstly is Wally's suggestion here .....

walter_plinge wrote:

.....then stash the remortgage money ...

Like Ian I personally don't think the Revenue would like this idea!!

Secondly, I didn't want to get too complicated at this stage and Wally does use the word "hypothetically".

I think this could become very complicated and I feel personally Wally should get face to face professional help. Hence my advice to Wally to read IR150 and to get advice from a CTA and/or ATT (which I'm guessing includes you!

)

Ian_W · 10 March 2006 at 12:54AM

I wasn't aware of that WHA, thanks very interesting but ....

From that it would appear that indeed you could re-mortgage your current property which is soon to be your "Buy to let" and claim all the mortgage interst as an expense regardless of to what use you actually put the amounts raised!

Interesting that the example quotes buying another property to live in, rather than simply "stashing the cash". I wouldn't have considered it conclusive proof that you can use the cash for any purpose and still claim the interest but there again I could well be wrong and often am. Who says tax has to be taxing!!

Wonder why they sent him to a rather exotic Rotterdam rather than Rotherham. :rotfl:

pootle666 · 10 March 2006 at 6:59PM

I think most things have been covered by other people, but don't forget the possible interaction with Capital Gains Tax. Letting out your property can effect the relief that most of us qualify when we sell our private houses free of tax. By letting it out you could trigger a capital gain tax charge. They are lots of rules surrounding this and several quite generous reliefs that may well mean that you would pay no tax, but you may be obliged to complete a Capital Gains Tax page on your tax return if, and when, you sell your property. I wouldn't worry about this aspect too much, but it would be worth seeking asking a professional advisor up front so you can plan accordingly.

Also just to clarify for you, if no-one else has mentioned it, if you want the IR to calculate your tax for you, you will need to have submitted your TR before 30 Sept. Otherwise you'll have to do it yourself.

pchelpman · 10 March 2006 at 7:13PM

Hi pootle666

Much of what you say is more or less right but - again - I didn't want this getting too complicated at this stage. Yes, Wally should think about CGT and, yes, he should get professional help to cover all aspects.

However this .....

pootle666 wrote:

Also just to clarify for you, if no-one else has mentioned it, if you want the IR to calculate your tax for you, you will need to have submitted your TR before 30 Sept. Otherwise you'll have to do it yourself.

....is not strictly correct.

The Revenue will always calculate your tax for you if you don't want to do it yourself. The point about 30th September is this.

If a Return is filed by that date then the Revenue GUARANTEE to let you know what tax needs to be paid and tell you in time for you to pay it by 31st January following.

If the Return is filed AFTER 30th September the Revenue will still calculate the tax but they don't guarantee to get it to you in time to pay by the deadline.

If their calculation doesn't reach you in time then "self assessment" definitely kicks in and you have to judge for yourself what to pay by the deadline.

Hope that clarifies the relevance of 30th September.

rh1_3 · 12 June 2007 at 2:25PM

Can anyone help - The HMRC advisor has just informed me that allowances are only claimable from the minute rent is received. How does this present itself for periods between rent or repairs required to make a property legal for rent?

pchelpman · 12 June 2007 at 2:39PM

rh1 ... Do not be hoodwinked by Revenue staff with limited knowledge.

The "Property Income Manual"* is now the definitive Revenue guidance on how they believe the rules work ...

http://www.hmrc.gov.uk/manuals/pimmanual/index.htm

Their view on expenses is mainly at PIM2000 onwards.

Have a read through this and post back if you have more specific questions but PLEASE DO NOT hijack someone else's topic.

Please start you own discussion on the forum. It keeps things cleaner dealing with one person's questions on one thread.

Thanks.

* EDIT >> the PIM supersedes the booklet IR150 referred to elsewhere in this thread.

PCH

monkeymax · 13 June 2007 at 10:52AM

rh1 wrote: »

Can anyone help - The HMRC advisor has just informed me that allowances are only claimable from the minute rent is received. How does this present itself for periods between rent or repairs required to make a property legal for rent?

I work for HMRC and can tell you that you decide the point at which you wish to start your rental business. if this is at the first stage of preparing your house for rental then that when your year starts, regardless of if you have recieved income. Some companies can trade for years with losses before making money.

Renting out my house...

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