mortgage paid off, renting property

longwalks1

I wish!! Im doing some sums and was wondering when I pay off my mortgage in full (within next couple of years), once its fully paid off if I was to move in with a friend, or move abroad and let the property would all of the return be mine, or would i be liable for tax?

clutton_2

rent is income - if your total income is more than your personal allowance then you will pay tax on it. But, you can claim a wide variety of expenses to run your lettings business - the Inland Revenue used to have a booklet (now an E-thingy) called Taxation of Rents - that tells you in boring detailed what you can claim.

longwalks1

thanks clutton
My idea was to pay it off completely, let the property and move abroad and not work.. would then I not pay tax on it, if i did not have a wage in the UK? I understand if i was stil learning but if i wasnt, and it let for say £800 pcm would I pay tax on that?

Thanks again

Alan_M_2

You'd be allowed to offset whatever your personal allowance is, the rental income is classed as earnings and is subject to the normal tax laws.

This only changes when you are paid from sources abroad and have no income derived from any business or employment within the UK (hence why we're very attractive to Russian Oligarchs)......

prudryden

You can deduct any and all expenses that relate to your renting of the property, as Clutton says. E.Q. Agents fees, Inventory/condition report, contract fee if done by agent, maintenance, replacement of fixtures, cleaning of property, window cleaning, office space, computer if used for business, filing cabinet for paperwork, postage, telephone calls etc.

rosysparkle

If you let your property and reside overseas for more than six months you have to apply to HMRC for an approval number in order to receive your rental income gross. If you do not have an approval number, your tenant or agent is obliged to deduct 22% tax before they pass the rent to you, and to pass this tax to the revenue. If your tax liability is less than the tax withheld, you can reclaim this once you have filled in your tax return. To apply for an approval number you need form NRL1 which you can download from the HMRC website.