Letting Primary House and Tax Implications

absman

If I let my own primary house and I live on rent somewhere else will it attract income tax?
Lets say, I am salaried having 40k annual salary.
Owning a house at £700 per month
And paying a rent of £700 for apartment where I live.
Will there there be any tax implication?

Thanks

Slithery

Yes.


You will have to pay income tax on any income from your rental property as well as being liable for CGT when you sell.

absman

Thank you Slithery. Was checking if there is anyway to adjust cost that is incurred for primary living.
Think its not good idea to rent property if you are living in the same city.
If you are working in different city then there is no option than rent and pay income tax.
Doesn't sound good, but I think its reason people sell there house if they are moving somewhere.

00ec25

absman wrote: »

Doesn't sound good, but I think its reason people sell there house if they are moving somewhere.

well durr

Why do you think the taxpayer should subsidise your living expenses by giving tax relief on your letting income because you choose not to sell up?

absman

Its not subsidy.. but its like paying incometax for primary residence.
if you do not rent but live in primary house is not expense.. but you pay rent and earn same amount as rent doesn't negate anything but rent treated as living expense and rented income..
anyways. answer is clear ..

The_Earl_of_Streatham

In what way is a house in which you don't live and is rented to someone else your primary residence?

AdrianC

absman wrote: »

Its not subsidy.. but its like paying incometax for primary residence.
if you do not rent but live in primary house is not expense.. but you pay rent and earn same amount as rent doesn't negate anything but rent treated as living expense and rented income..
anyways. answer is clear ..

I think you're confusing two separate things here.

If you run a residential property letting business, you pay tax on the profits of that business. End of.

Where you choose to live - owned or rented - is something completely separate.

You're assuming that because you only own one property, it should always be tax-free, whether you live there or not. No - it's simpler than that. If you live there, it's tax-free simply because you aren't using it for a property letting business, so there's no income TO tax. If you rent it out, you are, and there is.

Crashy_Time

00ec25 wrote: »

well durr

Why do you think the taxpayer should subsidise your living expenses by giving tax relief on your letting income because you choose not to sell up?

Good point.