Is it still income if tenants pay mortgage?

Darlyd

Do you have to declare lodgers? What about all these parents who charge their kids lodge? Is that counted as an extra income for the parents? See where I am going with this?

eshroom

darlyd wrote: »

Do you have to declare lodgers? What about all these parents who charge their kids lodge? Is that counted as an extra income for the parents? See where I am going with this?

I wouldn't want to leave £20k of lodger rent a year undeclared, that'd be asking for trouble!

I'll check my options outside of having lodgers repaying the mortgage... Shame though, I thought I had it sorted!!!

Darlyd

OMG my reply sounds so naughty..

I would think with the lodger paying part of your mortgage shows they have an interest in your home, and it could get nasty? I would not risk it anyway... What about if you reduced their rent, and got them to pay sky or something instead? Or is that defeating the object? lol

00ec25

eshroom wrote: »

I wouldn't want to leave £20k of lodger rent a year undeclared, that'd be asking for trouble!

I'll check my options outside of having lodgers repaying the mortgage... Shame though, I thought I had it sorted!!!

your option is simple - anything which you get the lodgers to pay for directly that you yourself would otherwise have to pay (mortgage, gas, electricity, water, Sky, phone, broadband, council tax) is very clealry attempted tax evasion unless you declare it using the correct ("normal") method as outlined in Owain's link and also in more detail on HMRC here

you would have to:
a) declare the total gross value of the payments made by the lodgers as your income; and
b) apportion the amounts they paid between you and them; and
c) you would not be able to claim your own share as a deduction from the income and in respect of the mortgage their their "contribution" towards it wil be 100% treated as your income and only the interest element would be allowed not the capital element

getmore4less

eshroom wrote: »

At no stage would I rely on the lodgers to cover my mortars. My wage would be my guarantee. However, since I hate borrowing, renting out 3 rooms to lodgers would help me clear the mortgage in record time - unless the added income for 3 lodgers (£20k+) pushed me into another tax bracket.

From what I understand rental income can only be offset against interest and not the full repayment.

To address some of the other queries - if they can then claim ownership, I think I'd steer clear. Maybe it's time to find an accountant?

With 3 lodgers you now move into HMO and CGT issues.

you need to do a lot more research