Calculating Interest for tax purposes

tuafc

Hi,

Apologies if this question has been asked before and answered but I have had a quick look around and can't find one that matches it. Feel free to point me in that direction if it exists.

My scenario is as follows:

I am renting out my flat and wish to offset the interest portion of my mortgage payments against the rental income to reduce my tax bill (having seen that advice on here).

What I don't know is what portion of my total mortgage payments (Capital+Interest) related to interest, as I undertand I cannot offset the capital repayments for tax purposes.

I have my statement from the bank relating to my mortgage, but it just shows me my 12 monthly repayments and and the outstanding amount at the beginning and the end of the year.
However the year that my mortgage runs to is not the same as the year I am renting my flat out for, so I would need to be able to isolate the interest repaid for any particular month.

I have a mortgage with approx 68k outstanding, with 20 years remaining. It is a tracker mortage and is at 0.5% above the Base Rate.

Can I calculate the interest repaid over any particular period (bearing in mind the interest rate moves but my repayments over the course of a year do not) or is this something I would have to request from my bank (and if so should it cost me?).

Many thanks

Thrugelmir

Ask your lender if the mortgage statement does not provide a detailed breakdown. The lender may well charge you as its not a standard request. However the cost will be offsetable as a business expense if you are charged.

JonnyBravo

Or download this excellent spreadsheet by Locoblade and stick in your figures. It'll give you the answers near enough.

http://forums.moneysavingexpert.com/showthread.html?t=1157173&highlight=

Thrugelmir

JonnyBravo wrote: »

Or download this excellent spreadsheet by Locoblade and stick in your figures. It'll give you the answers near enough.

http://forums.moneysavingexpert.com/showthread.html?t=1157173&highlight=

Ideally you should obtain official confirmation to provide as evidence to support the claim.

sunshinetours

tuafc wrote: »

Hi,

Apologies if this question has been asked before and answered but I have had a quick look around and can't find one that matches it. Feel free to point me in that direction if it exists.

My scenario is as follows:

I am renting out my flat and wish to offset the interest portion of my mortgage payments against the rental income to reduce my tax bill (having seen that advice on here).

What I don't know is what portion of my total mortgage payments (Capital+Interest) related to interest, as I undertand I cannot offset the capital repayments for tax purposes.

I have my statement from the bank relating to my mortgage, but it just shows me my 12 monthly repayments and and the outstanding amount at the beginning and the end of the year.
However the year that my mortgage runs to is not the same as the year I am renting my flat out for, so I would need to be able to isolate the interest repaid for any particular month.

I have a mortgage with approx 68k outstanding, with 20 years remaining. It is a tracker mortage and is at 0.5% above the Base Rate.

Can I calculate the interest repaid over any particular period (bearing in mind the interest rate moves but my repayments over the course of a year do not) or is this something I would have to request from my bank (and if so should it cost me?).

Many thanks

Its unlikely your statement shows all the monthly repayment amounts and the opening and clsoing balance but not the interest otherwise the statement won't add up! More than likely the annual interest is shown as one figure after all the list of repayments?

If you have the two annual statements that cover the tax year you are doing your return for you can time apportion the annual charge for each tax year (tax year runs to 5 April each year so do so many days in 08/09 and so many in 09/10 for instance)

Alternatively phone and ask your mortgage company for a tax certificate of the interest in the relevant tax year - they should be able to provide this

Providing you are consistent each year you do it, either way should be fine