landlord self-assessement

wildrosa

Hiya, can anyone tell me how to submit self-assessement on income from letting out a property that I own with my husband? Do:
1. we both declare both the income and charges (e.g. mortgage interest etc.)
)2. we both declare half of income and half of charges?
3. just one of us declares all income and charges?
Thanks for your help

Dazed_and_confused

Do you own it in equal shares?

If so then it should normally be 2.

Are you aware you can no longer claim mortgage interest in full as an expense. This is being phased out over a five year period (year 1 = old system, years 2-4 transitional rules apply, year 5 = new system fully implemented).

Hasbeen

The answer is No2 if equally owned %

wildrosa

Thanks, no I didn't know that I can no longer claim mortgage interest in full. This will be our first self-assessement, does this mean that we can claim as per the old system but from next year we have to apply the transitional year rules?

Or does the 5 year rule applies to everyone equally? is this year 1?
Thanks

Dazed_and_confused

We are currently (2018:19 tax year) in year 3, half way through the transition.

You are presumably completing Self Assessment returns for 2017:18 which was year 2, the first year the transitional rules applied.

Basically you can only (in 2017:18) claim 75% of the loan interest as an expense. Your tax liability is calculated on this basis and you may then be able to claim a tax credit/deduction off your tax bill based on the other 25% of the loan interest.

For some people this this will make no difference but the bottom line is your taxable profit will be more than it would otherwise be so it can affect people for lots of different reasons.

There is more information here,

https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies