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Buy to let
MastersStudent
Posts: 8 Forumite
I couldn't sell my house in Scotland, so we've been letting it, technically making £25 a month profit, but with paying for repairs plus making mortgage overpayments every month, it is about £2k a year loss. The house is probably now worth the same amount as is left on our mortgage. We've never declared it to the taxman, because we don't make a profit. Do we need to? With the new rules coming in, will we have to pay income tax (my husband pays 40% tax, so it would be a killer). Thanks for any advice anyone can offer.
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Comments
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MastersStudent wrote: »We've never declared it to the taxman, because we don't make a profit.
Is the mortgage on an interest only or repayment basis?0 -
Anything else you might have overlooked such as registering with the local council or protecting the deposit?0
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Thanks for replying, that's all covered, we have letting agents managing it and they kept us right registering everything at the beginning and our insurance covers it.0
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It's interest only, then we have a standing order for an overpayment.Thrugelmir wrote: »Is the mortgage on an interest only or repayment basis?0 -
... and you aren't including the overpayment as a trading expense to reduce any taxable surplus?MastersStudent wrote: »It's interest only, then we have a standing order for an overpayment.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I'm not sure if only the new rules we'll be allowed to or if only interest counts? Thanks for your reply.kingstreet wrote: »... and you aren't including the overpayment as a trading expense to reduce any taxable surplus?0 -
Only mortgage interest (and no capital repayments of any kind) can be treated as a trading expense for tax purposes.
That is the current situation.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks. Our current mortgage interest is only £25 less than the amount we receive in income. We then separately overpay by £200 a month plus pay for repairs, which has been £500 this year.kingstreet wrote: »Only mortgage interest (and no capital repayments of any kind) can be treated as a trading expense for tax purposes.
That is the current situation.0 -
tax return asks if you have any income from property, its always going to be a sticking point.Mr Generous - Landlord for more than 10 years. Generous? - Possibly but sarcastic more likely.0
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