tax advice please

mummyd_2

to help a family member out of a problematic neighbour situation we bought their house from them as a buy to let, lease going well has been rented out since 14/6/10.
house £65000 with 25% deposit.
rent £475 a month leaving £405 after agents fees and vat. interest only mortgage £212 per month
husband a higher tax, I am on lower tax.
can you tell me amount of tax that we owe please?
pay monthly £18 gas cover and know we need to take into account insurance which is 101.
however because i earn 20000, seemingly all tax needs to be paid via my husbands higher tax rate is this correct?

thanks in advance

CLAPTON

who owns the house (i.e. names on the deeds)
whose names are on the mortgage

is it furnished or unfurnished

if you only started renting it out 14/6/2010 the you don't need to summit a tax form or pay any tax until 31 January 2012 although it makes lot of sense to do it munch earlier

mummyd_2

thanks for your input.
mortgage is in joint names of myself and husband, and deeds ours too.
its a unfurnished 2 bed end terraced house (does have kitchen white goods.

your help is greatly appreciated
n

CLAPTON

firstly work out all your allowable expenses ... interest on the loan, agent fee, annual gas safety check, insurances and repairs etc.

the profit is the difference between the rent and the expenses
as you own the house together you are each responsible for paying tax on half the profit; so you will pay tax at 20% and your OH at 40% on your share of the profit

mummyd_2

thank you very much for your help.
can i ask 1 more.
the lawyers fees and surveyer fees to buy the house are they used against the profit pre tax?
thanks again
n

chrismac1

I'll PM you some links - no you can claiim these fees against any capital gains tax bill you MAY have when you come to sell.

McKneff

chrismac1 wrote: »

I'll PM you some links - no you can claiim these fees against any capital gains tax bill you MAY have when you come to sell.

Why PM the links, why not put them on here so that they might help other people.

chrismac1

"Why PM the links, why not put them on here so that they might help other people."

It's against the rules of the site.