Tax on property rental - please advise???

whitehouse

Hi all,

I was wondering if someone could please give me some advice on the following:

I current own a 2 bed flat which I am considering renting out to move in with my partner and paying them rent. The flat is in my name and I still have a mortgage on this property. I want to let the property furnished and through an agent.

Please can someone advise roughly how much tax I would have to pay (or what potential profit I would make, if any.)??? Agent fees are 10%. Mortgage payments are £410. Then rental would probably be £1,000 pcm. A rough breakdown would be excellent.

With kind regards


Whitehouse

rosysparkle

You will pay tax on the profits. Profit is rental income less expenses wholly and exclusively concerned with the rental. Your expenses will be the agents fees and associated VAT, insurance on the property and any insurances you take out against your tenants defaulting on the rent, interest (not capital) repayments on the mortgage, repairs, cost of the gas and elec cert etc... you also have a choice of claiming an annual 10% (of the gross rent) wear and tear allowance on the furniture and appliances or the net replacement cost (not the original cost): read about this here: http://www.hmrc.gov.uk/manuals/pimmanual/PIM3200.htm

Rental income 'sits on top' of your income from employment so the % tax you pay depends on what other taxable income you have.