tax on rent

joncdrl37

Due to unfordeen circumstances last june i had to move out of my house to move in with my disabled son to act as his carer at that time some close family friends were homeless and skint and i let them move in the house he then got a job and i charge him a nominal rent of £350 the mortgage is £200
How much tax would i pay on this and what is the easiest way to pay tax on it could i pay it so it is deducted from weekly wage or is it better to pay it yearly?

Gwhiz

You only pay tax on the NET profit BUT only your mortgage INTEREST is deductible, not the entire mortgage payment assuming you are not on an interest only mortgage.

Re tax - you will have to fill out a property form as part of the self assessment process at the end of the tax year and will then have until Jan 2012 to pay any tax that's owing.

Safest thing is talk to the tax office - they are very helpful.

joncdrl37

ok will do i am on interst only mortgage by the way

tbs624

Is your mortgage a residential mortgage and, if yes, have you discussed this rental with your lender? There is a greater risk to the lender when a property is let out and you would normally have to seek Consent to Let or switch to a Buy to Let mortgage. There are cost implications for both.

If you fail to let your lender know then you will be in breach of the Ts and Cs of your mortgage and, in theory, your Lender could foreclose meaning that you have to sell up.

Please don't just assume that they "won't find out" - http://forums.moneysavingexpert.com/showpost.php?p=39866624&postcount=10

The Lender will usually insist that your tenants are signed up to a formal AST (assured shorthold tenancy)

Have you let your insurance company know that you have let the property out? You need specific LL cover. Have you provided your T with an EPC, a gas safety check/certificate ?

If you are in receipt of any benefits have you already declared the rental income?

Are the current occupants registered for Council Tax - if it is still in your name and you had a single occupancy discount in place, you'll need to get that sorted out.