Ok I want to lease out but I'm confused..help??

Neorion

Hi folks,

I had a fire last year and just had my flat re-done, in that time (almost 1 year) I have met someone and moved in with her:D . Her company pays for her accomodation as she is an ex-pat working in the oil industry.

I want to rent out my flat and I have registered as a landlord and sought my mortgage companies approval but I am confused as to how my Tax will work out.

I have called the tax office and asked what to do and they said just call back in April and they will talk me through a tax return.

what I really want to know is how much will I be taxed. The mortgage is £490 per month which will rise by 1% when I tenant moves in assuming I do it "correctly" and tell them. My Landlords insurance is currently £43 per month.

can anyone explain how this all works? I want to charge around £500 a month just to cover the mortgage if I go through an agent I will pay 10-12% on top, can I claim this back?

People have told me I will be lucky if I break even, my question would be whats the point in doing it if I wont be any better of?

I have sat on this for a while now and leasing agents dont really explain things they are more interested in getting their money which is understandable.

I guess to talk figures here goes.
Current Mortgage £490
Rental hopefully £490-500 Profit = £0 to £10
Insurance £43

Total -£43-£53

What confuses me is I pay £490 right now so someone paying that for me must be a better thing right?


Sorry if I have rambled on.

Any advice would be great if you can make sense of what I asked haha!

rosysparkle

Assuming you find a tenant, the point of doing it is that someone else pays your mortgage for you. You'll be better off by the amount of mortgage you don't have to pay.

f you don't make a profit after offsetting all allowable expenses, you won't have any tax liability. You don't get a tax refund if you make a loss.

Only the interest portion of your mortgage is an allowable expense, not any part of the capital repayment.

This HMRC sheet: clickylinky will give you some ideas of which expenses are allowable.

Neorion

Thats great!

Thanks for the information I will check out the link.:beer: