Any Tax Perks for Renting out a House

magicmaria

Hi

Please can anyone offer me some advice, my boyfriend rents out his mortgaged house are there any Tax benefits he could be claiming for doing this i.e, building and repair work general maintenance etc., thank you in advance for any help and advice you can give me

dunstonh

Many expenses on the property can be used to offset the income or future capital gains tax (when he has to pay that). There is no such tax perk but its just a case of profit being taxable and on the whole, profit means income less expenses.

Ian_W

As per dunstonh's post but to put a bit more flesh on the bone:

You can deduct legitimate running costs from the rental income received and your BF's income tax on letting is based on the profit.
For example you can claim agents fees, mortgage interest [not capital repayments], advertising for tennants, repairs etc, as expenses. If it's let furnished you can claim for renewal of furnishings [not the cost of the originals] either on a one off basis for each item replaced or by a "wear & Tear allowance" that roughly equals 10% of your letting income.
If the building work is an improvement, rather than a repair, eg double glazing replacing single glazing, then it may not be counted as a running cost but can be offset against CGT when/if your BF sells.

The IR publish a booklet [best cure for insomnia I've yet found!!] which isn't too easy to follow but might be worth asking them to send you. Best bet I found was to compile a list of income & expenditure [keep receipts] and see an accountant. Shouldn't cost too much [& it's also an allowable expense] and once you've got them to do the first property return and it's not difficult to diy in future years.

Hope that helps.