Rental income

Marker_2

Recently rented out my home, and have moved in with my parents.


My mortgage is £350pm
I rent it out for £500
I receive £440 of that after estate agent fees
I pay my parents £200pm


New to this so not sure what I do for a self assessment, if I have to do it etc. This is a temporary measure where I will return to my home as well.

[Deleted User]

Your income will be £6000 per annum.
Your expenses will come off that to arrive at your profit.
These will include the £720 that you pay your agent and the mortgage INTEREST, not the mortgage repayments.
What doe the payment of £200 to your parents relate to with regard to the property?

Marker_2

[Deleted User] wrote:

Your income will be £6000 per annum.
Your expenses will come off that to arrive at your profit.
These will include the £720 that you pay your agent and the mortgage INTEREST, not the mortgage repayments.
What doe the payment of £200 to your parents relate to with regard to the property?

I think my interest is £120 (really rough workings out as haven't got docs infront of me).


The rent I pay is board and lodge basically. Contribution to increased bills, they are on a water meter, gas, electric, and an inconvenience payment for using three of their bedrooms (my kids have a room each and me).

Marker_2

I work full time, but am a full time OU student as well ... so when Council tax for me needs paying I pay that in addition to the £200.

Marker_2

Also just as an aside. I have rented out my house for this period to allow me to save a bit of money to live as I intend on completing PGCE in 2 years. My income when I do PGCE will be based on benefits and grants only, but I know I will not be entitled to Housing Benefit, and know any monies I get while doing my PGCE will not cover mortgage and normal bills, so just trying to get ahead of the game so its not so much of a struggle when I do the PGCE and have to resign from my current full time employment.

[Deleted User]

I was under the impression that you paid your parents some kind of salary e.g. assisting with the property. However' as it is essentially for board and lodgings this is irrelevant with respect to your rental income. You can only claim expenses associated with the rental property.

Marker_2

Ok so any idea when I need to do a self assessment - I assume I can download these online? My house has been rented since Aug 17.

TheCyclingProgrammer

You can register for self assessment any time from now but you should be registered by 5 (or 6 can’t remember off the top of my head) October 2018 and your tax return for the current tax year will be due for online filing by 31 Jan 2019.

You’ll want to keep a record of all rent received, a statement showing your mortgage interest for the period and receipts for your agent fees and any other costs incurred relating to renting the house if any.

00ec25

HMRC provide an online "course" for new landlords explaining the basics of how to calculate your taxable net profit and how and when to declare it

see here:
http://www.hmrc.gov.uk/courses/syob3/new_letting/HTML/new_letting_menu.html

NineDeuce

I would just advise your parents to charge you more.......

Pennywise

NineDeuce wrote: »

I would just advise your parents to charge you more.......

How will that affect the OP's personal tax return and personal tax liability? It won't!