Tax return and interest on mortgage

jonosh69

Hoping this makes sense, someone can help and apologies if this is an obvious question.

I will be doing my first SA tax return for rental income. In the section that asks for interest on loans, does this mean the interest I get charged each month. E.g my mortgage repayment of say 1000 is applied to the outstaning balance and then the debit interest of say 600 is deducted.

Am i totalling up the debit interest to set off against the total income?

nomunnofun

It means the actual amount of interest paid on the loan in the 2012/13 tax year. If you ask your lender for a certificate of interest for that tax year they should oblige. I certainly would have difficulty in arriving at the correct figure - reducing balance, different rates applied etc. I would not recommend entering a figure that you have calculated yourself.

BobQ

OP You pay tax this year on your rental income in the last tax year less legitimate expenses like mortgage interest.

Just ring the mortgage provider and asked how much mortgage interest you paid on your loan during the last tax year. You do not need to work it out each month its much easy to let them give you the figure. They will give you an annual figure for the tax year. They may charge you a small admin fee if you want it in writing (and you can claim that fee as an expense).

Of course if you are not doing an official buy to let the mortgage provider might find your question rather strange.

The important thing is to ensure you only claim the interest not the total repayments.

jonosh69

Great stuff, will get on to the bank in the morning.

thank you both.