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renting out house tax
wycombe1690
Posts: 1 Newbie
hi me and my girlfriend own our house outright, but want to rent it out whilst we rent somewhere else in another area, can anyone help with info on paying tax on our property which will be let out. we are in the process of arranging letting agent, certificates, etc do we have to keep a record of bills and when do we pay the tax on rental income we are both employees on paye, basically we dont have a clue,:) lol can anyone help thanks
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Comments
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You pay tax on the profit at your prevailing rate of income tax. Basically rent less deductibles = profit
You can make deductions such as LA fees, 10% of rent if fully furnished, gas certs, membership of a LL organization, repairs but as it's fully paid off you have no mortgage interest to deduct.
This profit cannot form part of your tax free income tax allowance so even a non tax payer will pay tax.0 -
rubbish - if the owner has a total income, including the taxable profit, which is less than their tax code (ie. personal allowance) then they would pay no taxThis profit cannot form part of your tax free income tax allowance so even a non tax payer will pay tax.
However, if the net profit is negative - ie a loss - then in that circumstance only you cannot offset that loss against your PAYE income
read the basics on the directgov website here
OP - you must declare the income to HMRC, you may be required to do a SA tax return each year. Write to your tax office (the one who deals with your PAYE) to inform them of your renting - they will decide if you need to do a full SA return
Note even if your net profit is below £2,500 or your total income before costs is <£10k this does not mean its tax free, it still has to be declared but tax on it may, at the discretion of HMRC, be collected without having to do a SA tax return0 -
You'll find many useful links in this post here, to sources of all sorts of relevant information.0
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