Tax on rental income question

holly_hobby

jgh wrote: »

You wife is a non-tax payer because she has no income to be taxed. As soon as she starts receiving income from the rental property, she *will* have income to be taxed.

No thats incorrect, she only pays tax on income that exceeds her annual PA.

Hope this helps

Holly

dbs

Thanks for all the replies.

Am I correct in saying that a buy to let mortgage you can offset interest payments against tax on rental income but if the mortgage is on our main residence it cannot?

holly_hobby

Mge interest payments re a BTl may be offset - whether the mge is actually secured on the let property, or on your private residence (ensure there is a clear audit trail from the equity release on your PR and the pch of the BTL to ensure you keep HMRC happy !).

This is because any finance released from your private residence to fund the BTL (which includes its purchase, redeeming a BTL mge on it, funding repairs etc), is classed under HMRC regs as "capital injection into a business" - which is what a being a Landlord is of course !

Hope this helps

Holly