Renting out my property

steviebr

I am in the forces and due a posting away from home, i have arranged to rent out my house rather than sell it, this is being done privately. I do not have a buy to let morgage but my morgage company is allowing me to rent it out due to my circumstances.

Does anyone know if i will have to declare it to the inland revenue, or what will my tax position be

bobbie78

i would assume it depends on if you are still getting paid in the uk - which i guess you are - so best bet is to give the hrmc a ring and ask them if you were to rent out your house for x a month you pay mortgage of y which has z amount of interest as part of it, they will let you know which bits count as taxable and which bits don't. I'm sure someone will be along to explain how the whole btl landlord thing works. good luck with your posting hope you come back in one piece.

grey_lady

If i remember rightly... the rental income is taxable, however you can deduct the interest part of the mortage and expenses e.g letting agents fees, repairs etc and then whats leftover is taxable.

hth

Sammy85_2

My only advise on this one would be not to "wing it". If you mess up on your tax the tax man will come and get you, big time.

I personally pay an accountant to deal with it all for me (i work offshore as well so it really is a necessity for me), it costs around £200 a year, but you dont have to do anything complicated. You sign a form each year giving permission for him to deal with the IR on your behalf and you send him all your documents at the end of the year, it so simple. No filling out millions of forms and trying to work your way around complex taxation rules, hoping youve got it right.

Make sure you keep detailed records of monies received and paid out. If you're doing it privately you wont have official receipts from a letting agent, so you have to make sure you have complete records for the tax man.

Hope thats of some help.

silvercar

grey_lady wrote: »

If i remember rightly... the rental income is taxable, however you can deduct the interest part of the mortage and expenses e.g letting agents fees, repairs etc and then whats leftover is taxable.

hth

All correct.

You also get the benefit of being allowed to count the home as your PPR, even though you are away and letting it, due to your work sending you away. So no CGT to pay when you sell it.

steviebr

Cheers for the help, just a pain of not knowing what to do. So i take it that if the rent i will be getting does not cover the morgage i wont have to pay income tax?

clutton_2

not only will you not pay rent on your loss, you can carry forward some losses to the next financial year which is why you need an accountant in my view. The tax returns (property section) is very complex and i dont understand it and i have been in the business for 7 years !

CLAPTON

steviebr wrote: »

Cheers for the help, just a pain of not knowing what to do. So i take it that if the rent i will be getting does not cover the morgage i wont have to pay income tax?

no not, quite you are only allowed to deduct the interest on your mortage from the rental income and not the total amount.

clutton_2

you can also deduct insurance costs, letting agents costs, repairs, CORGI gas inspections, postage, telephone calls, maintainance charges if it is a flat, travel to the property/agent when you are in the uk, use of a computer to run your business. BUT any capital costs - improvements like additional shower rooms etc can only be claimed on sale.

the IR have a booklet on line called "IR 150" rental income and expenses

macaque_2

steviebr wrote: »

I am in the forces and due a posting away from home, i have arranged to rent out my house rather than sell it, this is being done privately. I do not have a buy to let morgage but my morgage company is allowing me to rent it out due to my circumstances.

Does anyone know if i will have to declare it to the inland revenue, or what will my tax position be

It grieves me deeply that Service personnel pay income tax on active service whilst use.less people on income support wangle thousands of pounds out of the system for a 17 hour week.

steviebr

i have to say the helpfulness of people has been fantastic, all the people that have replied have provided me with an insight to what i need to do, just wish was the goverment and councils felt the same way, they will screw out all the money they can get even when your not there.
All i can say is people like me in the RAF and the other services work our !!!!!! off day in day out with no overtime bonuses and the people who claim benefits do better than us makes me feel sick and disgusted at the way the goverment is run