If i Let my property will I have to pay tax?

ivavoucher

Can any loss made be deducted from other tax liabilities? such as wages?

Ulfar

mattbell wrote: »

How are we making a profit on anything? we have to rent another home for ourselves to live in and are only doing this because we have to not because we want to?

If our expenses are more than the income then why would they tax us?

Your living expenses are not an allowable business expense. The allowable business expenses do not include capital mortgage payments.

If the rent received from your tenant > allowable expenses then you have made a profit.

You will pay capital gains tax on selling the property if you have made a capital profit. You will also have to complete a self assessment tax return at the end of the year.

shop-to-drop

I would be really weary of doing this to be honest. We rented our house out while renting abroad for work. We had 2 lots of tenants and neither wanted to play by the rules or pay the rent. We had letting agents as well but they were useless although expensive. We were OK as my husbands employer paid all our expenses but if we were relying on that income to pay the mortgage we would have been in trouble.

theartfullodger

Can any loss made be deducted from other tax liabilities? such as wages?

No, but you can carry property losses forward to the next tax year and if you make a profit then, reduce that by the previous losses (and so on...)

Cheers!

Lodger

G_M

mattbell wrote: »

How are we making a profit on anything? we have to rent another home for ourselves to live in and are only doing this because we have to not because we want to?

If our expenses are more than the income then why would they tax us?

The rent you receive from your tenants is 'income', which is taxable. Just like if you go to work and receive income, or run a private business. All income. All taxable.

The fact that you pay rent yourself elsewhere is irrelevant - you cannot offset it against the income you are earning. As has been explained, you can only offset certain allowable expenses against the rental income, so you need to calculate these to see how much tax you will actually pay.

PasturesNew

mattbell wrote: »

- Mortgage £704 p/m (repayment - 2% interest)

Guessing this is a £185k repayment mortgage at 2%, then you're paying approximately £290 interest and £450 repayment each month.

The £290 interest is an allowable expense.

Ignoring all the other allowables, for purposes of illustration, if you rented it out at £700 then the profit would be £700-290=£410/month. So you'd pay tax on that.

So what you pay tax on will be £410, less allowable expenses.

As has been pointed out above, where else you live, if you rent, etc etc is NOT an allowable expense. So maybe you'd pay tax on £200/month of it (as a complete guess). How much tax you pay will depend on your current salary/tax rate and that of your other half.