Avoid tax on rental property

rfsk2010

I rent out my only home as i had to move elsewhere due to work commitments. The mortgage is 750 pcm, and I get 1000 pcm every month ( 928 after the rental agency fee is deducted).

My understanding is , the 178 gbp difference ( 928-750) is taxable.

Can i overpay my mortgage to avoid paying tax on this?

chucknorris

rfsk2010 wrote: »

I rent out my only home as i had to move elsewhere due to work commitments. The mortgage is 750 pcm, and I get 1000 pcm every month ( 928 after the rental agency fee is deducted).

My understanding is , the 178 gbp difference ( 928-750) is taxable.

Can i overpay my mortgage to avoid paying tax on this?

No you cannot, and furthermore you will have to deduct the capital repayment from the mortgage because only the interest (not capital repayment) is allowable as an expense.

But you are also allowed to claim for maintenance too, as well as a few other things. If your property is furnished you can also elect to offset 10% of the rent for wear and tear.

I do my own accounts, but it is probably worth it for you to use an accountant until you learn the ropes. You should consider joining an organisation such as the RLA or NLA, it isn't expensive (the membership fees are tax deductible) and they are a very good source of information for both experienced and inexperienced landlords alike.

EDIT: links to those websites:

http://www.landlords.org.uk/

http://www.rla.org.uk/