Minimising tax on rental properties.

jase_31

I have (or will soon have), a couple of properties. Is there anything I should be doing to offset tax?

Own Property (my name only). Interest Only £400 pm
Rental Property (my name only). Mortgage Interest Only £133 month / Rental Furnished £475pcm
Rental Property (Joint Tennancy with unmarried partner). No Mortgage. Rental £450pcm.

I will earn approx 23k gross from PAYE income, plus rental income, and a little other investment income (all taxed apart from rental). My partner has no other income.

Will we both need to submit self assessment returns? What is the best way to mitigate income tax.

As far as I understand a 10% allowance can be made from the rental on the furnished property, and the mortgage interest (from the rental property) can be offset against rental income.

Can the rental from the property (held as a joint tenancy) be attributed to my partner, to make allowance of her tax allowance, or does it need to be apportioned 50/50?

Is it allowable to take out a mortgage on the rental properties, and pay off a own personal mortgage with the proceeds, and then offset interest against the rental income. This may not actually result in a saving, taking into account the higher interest rates of BTL mortgages.

fengirl_2

The best advice I can give is to keep very accurate records, not only of the income, but also for all of the expenditure. If you can put all this through a separate bank account you will find trackng your expenses easier. This will reduce the tax due as much as is legally possible.
You will both need to self assess as this is separate income for you both.
Yes, you will include the interest paid on the mortgage on the let properties in your rental accounts and there is a 10% wear and tear allowance if the properties are let furnished.
if you own a property jointly, then the income is split in the proportion of ownsership you cannot allocate it all to one person if they dont own all of it.