Renting and Tax implications

tsb

Sorry jolly saver,I was replying to johngc,but I think in your case,yes it is pure profit

jubblyjimbo

Jolly - You should be able to deduct mortgage interest (if any), agents commission, repairs and maintenance and such like. Any rental income in excess of these expenses is profit that will be taxed. You should consult an accountant. (Accountants fees can be set against the rental income too, I think).

Gorgeous_George

I'll reply to the OP and suggest anyone else starts their own thread to avoid confusion.

The interest portion of your mortgage and any running costs such as re-decoration, car travel etc., can be off-set against rental income.

Home improvements such as a new conservatory can be eventually be off-set against CGT. Cgt is charged at your income rate for the year it is derclared as if it had been earned. Therefore, some of it may be taxed at 22% with any sum that encroaches into the 40% tax band being taxed as such.

There is £9,200 CGT exemption for each person selling the house this year. In joint names the property would benefit from £18,400 exemption (at this year's rates). Then there is taper relief. Plus, if you move in, there is further allowances but at this stage it is best to ask silvercar or seek professional advice.

There cannot be many places left in the UK where BTL is worthwhile. Remember to factor in the risks before making your decision.



GG