Renting while renting out your property

tobiwankenobe

Hi all,

I and my partner are in the lucky position where we own our house. However it's in Southampton and work currently takes us to London. We do not want to commute (and technically can't as we'd have no time to eat, house chores etc) and so will be renting a flat in London. In the mean time we are renting out the house in Southampton.

Currently the rent looks like income and would be classed as so when filling in tax returns. I am self-employed, my partner works for the NHS. However, we're paying more for the rent of the London flat than we get from the Southampton house.

Is there any way the rent of the Southampton flat can offset the rent paid for the London flat so we do not pay tax on the 'income' of the house.

Thank you for any help or advice on this matter.

Toby

00ec25

two word answer: absolutely not

all income from rental must be declared and the only deductions you can claim against that are related to costs of the actual property being rented itself, not how you choose to spend that rental income on renting your other property

PS there are no "" around "income", the rent looks like income because it is income, try anything else with HMRC and they will "do you"

chrisotherwise

Clearly you will have to pay tax on your rental income, even if you use it to pay rent on your flat. But is that fair?

It's a curious anomaly of our tax system that those who can afford to buy a house can make huge profits selling it without paying a penny in tax - yet those who rent (who often have less money) cannot even claim their rental payments against tax.

John_Pierpoint

Back in the 1950's there was a notional taxed benefit for owning your own home - needless to say it was very unpopular.
Seem to remember it was called schedule A (No relation to later schedule A's)