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sell or rent out - the future?
Comments
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If you let the property for the next two years how much will you have in savings once you've paid tax on the rental-income? Don't forget that as it's an I/O mortgage 100% of the mortgage-payments can be offset against the income for tax-purposes. Plus all of the other allowable expenses.0
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BitterAndTwisted wrote: »If you let the property for the next two years how much will you have in savings once you've paid tax on the rental-income? Don't forget that as it's an I/O mortgage 100% of the mortgage-payments can be offset against the income for tax-purposes. Plus all of the other allowable expenses.
erm that might be above my head
I rented it out for the exact mortage repayment amout, so didn't make on it at all. I did it through a letting company and wasn't aware on any tax?
in 2 years I hoped to have saved £25k
can you give me a bit more detail on your comment above - cheers3-6 Emergency Fund, No96: £1,000 / £2,000 - House Deposit: £11,000 / £11,000 - Holiday Fund: £100 / £1,300 -
June 2018 Grocery Challenge £61.59 / £2500 -
If the total amount of rental-income was equal to the interest-payments, then you haven't broken even, you've made a loss. Where did the money come from for tenant-referencing, check-in inventory, agent's commission on rent collected, gas-safety checks, repairs and maintenance?0
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BitterAndTwisted wrote: »If the total amount of rental-income was equal to the interest-payments, then you haven't broken even, you've made a loss. Where did the money come from for tenant-referencing, check-in inventory, agent's commission on rent collected, gas-safety checks, repairs and maintenance?
thankyou for this
all that came out of my own pocket - if I did it again I would do it differently as I can get more rental income that my mortgage repayment but I found someone asap and was in a rush to get in, so it wasn't properly thought out - but 2nd time round I would get more rent and so forth
are you sayin if I got more rental than my repayment I would have to pay tax on this?
show I see a financial advisor over this do you think?3-6 Emergency Fund, No96: £1,000 / £2,000 - House Deposit: £11,000 / £11,000 - Holiday Fund: £100 / £1,300 -
June 2018 Grocery Challenge £61.59 / £2500 -
mylastpound wrote: »Are you saying if I got more rental than my repayment I would have to pay tax on this?
Yes, that is precisely what I said. In fact, even if you didn't make a profit you should still have declared the rental-income to HMRC in any case. Then you could have offset all of those expenses which you funded out of your own pocket against your tax-bill. HMRC have the ways and means of finding out that you've been renting your home without declaring it, so I suggest you do this right away. Like immediately!
And no, you don't need a financial advisor. If you're not competent to fill out your own tax-return you should pay an accountant to do it on your behalf. That could cost you about £150 but you could find that you might be entitled to a rebate of a similar amount for the additional expenses which you haven't offset.0 -
BitterAndTwisted wrote: »Yes, that is precisely what I said. In fact, even if you didn't make a profit you should still have declared the rental-income to HMRC in any case. Then you could have offset all of those expenses which you funded out of your own pocket against your tax-bill. HMRC have the ways and means of finding out that you've been renting your home without declaring it, so I suggest you do this right away. Like immediately!
And no, you don't need a financial advisor. If you're not competent to fill out your own tax-return you should pay an accountant to do it on your behalf. That could cost you about £150 but you could find that you might be entitled to a rebate of a similar amount for the additional expenses which you haven't offset.
arrh I see, I would of thought the letting company would of made me aware of this seen as I paid them to manage ect
so B&T do you think I should rent out until 2015 when my CTL ends and plough money in to make a repayment or should I just sit and wait for a buyer - but I cant drop any lower
?? :beer:3-6 Emergency Fund, No96: £1,000 / £2,000 - House Deposit: £11,000 / £11,000 - Holiday Fund: £100 / £1,300 -
June 2018 Grocery Challenge £61.59 / £2500 -
Managing a rental-property is a million miles away from managing your tax-affairs! You DO NOT want to fall foul of HMRC for non-declaration of your rental-income regardless of whether you made a "profit" on it or not. There are penalties for not doing so.
My own feeling is that you should keep hold of that PPI £7k for in case of dire emergencies, use the not-having-to-pay-rent to live with your b/f as a savings stream and let the property for as long as your lender will give you Consent-To-Let. Be in no doubt whatsoever that CTL is not open-ended and being on I/O will mean that they will be looking to get you onto a repayment mortgage at some point, or worse for you a BTL. If either of those happen, you're going to need that £7k and savings and more.0 -
Cheers B&T - thankyou for taking the time to read and advise me on this - very grateful - you've opened a new door and I need to research more regarding HMRC - thankyou3-6 Emergency Fund, No96: £1,000 / £2,000 - House Deposit: £11,000 / £11,000 - Holiday Fund: £100 / £1,300 -
June 2018 Grocery Challenge £61.59 / £2500
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