Quick HypoTax Question

Accidental-Landlord_3

EDIT - title was meant to say Quick Hypothetical Tax Question - sorry

Good Afternoon All

Just a really quick, hopefully basic tax question......

I will be moving in with my partner in the near future and was debating between selling my house or renting it out.
If I rent it out, I know I need to declare everything to HMRC, but I have a small question about income.

Let's say that my normal job pays me £30k a year, so I am a basic rate tax payer, and my personal allowance is already used up with that.
I then rent my house for £833 a month, which will give me an additional £10k a year.
However, each month I have to spend £800 of repairs for various things like leaks, white good failures, etc etc, meaning that my actual profit would only be £396.

Would my tax due be based on the full £10,000 or just the £396?

The above is purely hypothetical - just need to weigh up the two options.

Thanks in advance

CLAPTON

Accidental-Landlord wrote: »

EDIT - title was meant to say Quick Hypothetical Tax Question - sorry

Good Afternoon All

Just a really quick, hopefully basic tax question......

I will be moving in with my partner in the near future and was debating between selling my house or renting it out.
If I rent it out, I know I need to declare everything to HMRC, but I have a small question about income.

Let's say that my normal job pays me £30k a year, so I am a basic rate tax payer, and my personal allowance is already used up with that.
I then rent my house for £833 a month, which will give me an additional £10k a year.
However, each month I have to spend £800 of repairs for various things like leaks, white good failures, etc etc, meaning that my actual profit would only be £396.

Would my tax due be based on the full £10,000 or just the £396?

The above is purely hypothetical - just need to weigh up the two options.

Thanks in advance

currently it would be based on £396 if this were the difference between rental income and allowable expenses

however the rules are changing over the next few years but these affect mortgage interest which you don't mention

Accidental-Landlord_3

Thanks for the fast reply - yes you are correct, luckily there is no mortgage.

agrinnall

If I owned a house on which I was having to spend £800 a month in repairs I think I'd be selling it rather than making a tiny profit (and that's assuming no void periods - 2 weeks without tenants would wipe out the entire annual profit).

Accidental-Landlord_3

duplicate post

Accidental-Landlord_3

agrinnall wrote: »

If I owned a house on which I was having to spend £800 a month in repairs I think I'd be selling it rather than making a tiny profit (and that's assuming no void periods - 2 weeks without tenants would wipe out the entire annual profit).

Yes, me too.

agrinnall

Accidental-Landlord wrote: »

Yes, me too.

Good job it's a hypohouse then .