Rent out proprty - Tax question

Ivrytwr3

Hi all,

This is a very niaive question and for that i apologise!!

I am about to rent out a house through a letting agency. I have set up a seperate account for rent payments and any bills i should receive.

I have been advised that i can offset any bills etc against my tax bill, my question is how do i do this, what can i claim? and what can i expect to receive?

I have searched threads here but cannot find anything useful.

Any takers?

EdInvestor

Mortgage interest ( but not capital) payments
Letting agency fees
Insurance
Limited amount for depreciation/maintenance (if furnished)

Natelle_2

Have a look at the Inland Revenue website in general and this page in particular as it's about land & property income and expenditure.

My other piece of advice is reconsider your use of a property agent. You can DIY.

Ivrytwr3

Oh my God!!! My eyes have glazed over reading that!! I appreciate that this is an important document, but has anyone filled in one of these and published it on line ie an example?

As for letting the property myself, i would not dare!! Maybe if i get the hang of things later.

EdInvestor

List of items to claim

http://business.scotsman.com/finance.cfm?id=2076882005

Natelle_2

Ivrytwr3 wrote:

Oh my God!!! My eyes have glazed over reading that!! I appreciate that this is an important document, but has anyone filled in one of these and published it on line ie an example?

As for letting the property myself, i would not dare!! Maybe if i get the hang of things later.

Just a further thought, while you're worrying about what expenses you can claim against rental for tax puposes, you're going to give away possibly 10% management fee plus VAT @ 17.5%, thats 11.75% of your rental income, for something you can do yourself. Based on a rental of £500 per month that's £705 per annum.

My suggestions would be;
1. Purchase 'The Which? Guide to Renting And Letting' at a cost of say £12.
2. Use an accountant to advise you and fill in your self assesment tax return at a cost of say £150, or the free service offered by the inland revenue.
3. Manage your property yourself, saving any agents fees.

The net result could mean you'd be in the region of £500 to £600 better of each year depending on your rental income.

Just a thought - from a DIY landlord.

Ivrytwr3

Thanks for that Natelle,

I would love to rent the property myself, but for 2 reasons i cannot, 1 i may be moving away from the property in the near future and 2 i daren't!! I am new to this, so maybe in a few years if i know what i'm doing.

PS Which Guide (you got an oline copy handy?!) and Inland Revenue fill in my tax form for free?