Interest on BTL Mortgage

squiddlydiddlies

Hi everyone

I have been sat here googling for about 2 hours and am still none the wiser. I have just changed my mortgage to BTL so I can let my flat and move with work.

I know I can claim mortgage interest as a tax allowable expense (amongst other things) but to be honest, I don't understand what that means.

How do I work out the annual interest on my mortgage is?

The mortgage payments monthly are about £100 more than the rent I will get, so I will be notionally running at a loss. What tax implications does this have?

Will the rental income be added to my employment income and so I'll get some of the PAYE interest back?

I am a higher rate tax payer and I know I'll have to do a self assessment.

Many thanks

sooz

squiddlydiddlies wrote: »

Hi everyone

I have been sat here googling for about 2 hours and am still none the wiser. I have just changed my mortgage to BTL so I can let my flat and move with work.

I know I can claim mortgage interest as a tax allowable expense (amongst other things) but to be honest, I don't understand what that means. find a good accountant

How do I work out the annual interest on my mortgage is? look at your mortgage statement - they work it all out for you

not sure about your other questions. I'm fairly sure you can carry losses over on the rental part of your return.

squiddlydiddlies

Thanks, as I'm making a loss and the amounts involved are quite small, I was hoping not to need an accountant and learn to do it myself-is that possible? I know accountants fees are tax allowable as well.

silvercar

squiddlydiddlies wrote: »

Thanks, as I'm making a loss and the amounts involved are quite small, I was hoping not to need an accountant and learn to do it myself-is that possible? I know accountants fees are tax allowable as well.

Of course its possible and to be honest with only one BTL an accountant may not be worth the expense.

Plenty of threads on the tax board listing the expenses that are allowable.

The bottom line is that if you make a loss you can carry forward that loss onto the next years tax return. So if you come to a point where you make a profit you can use the previous years' lossess so that you pay less (or no) tax on it. You cannot put the losses against your earned income unfortunately.

tbs624

You should be able to do it yourself for just one property.

You can't offset losses from your rental income against your earned income, but you can carry them forward for next year. See here here here and here for guidance.

Edit: Echoing the content of Silver car's post which wasn't there when I started!