Letting a home for the first time - tax

lettingsnewsbie

Hoping someone may be able to advise.
Husband and I have owned our current home (mortgaged) for 4 years, however we will need to let our property out later this year as we are moving into armed forces accommodation due to a relocation posting. I am aware we will need permission from mortgage company to do this, but I am more confused about what elements of the rental income are subject to tax. I know we can offset some of the rent against agent fees and repairs but I am confused as to how the mortgage repayments come into play with respect to tax relief. Can anyone advise?
As mentioned, this is the only property we own.

oldbikebloke

there are many websites that set out in a lot more detail everything you need to know rather than asking people to write it out again on here

start with the basics here: 
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

this page covers some general ideas, but please do not confuse yourself reading bits that do not apply to you 
https://www.gov.uk/renting-out-a-property
when you get to the tax page, please understand for tax purposes you are NOT running a property business, so reference to national insurance etc does not apply. There is a huge diffidence between running a property business (involving eg multi properties and full time work at it) and what you are doing, which is simply letting a single property. Read the section on property you personally own, and residential property costs (ignore furnished holiday lets, you ain't doing that)

there are some slightly more advanced explanations with examples of mortgage interest relief here
https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies
and here:
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-case-studies

greatcrested

You've mentioned tax, and mortgage consent. I assume you are aware of the other requirements and responsibilities...?

lettingsnewsbie

greatcrested said:

You've mentioned tax, and mortgage consent. I assume you are aware of the other requirements and responsibilities...?

Thanks. I've read through most of the links you have posted but I'm still not that sure of a new of the financial implications so may speak to an accountant to ensure we budget correctly.
Other responsibilities I'm aware of are:
Landlord insurance
Repairs 
5 year fixed electrical testing (no portable appliances so no PAT)
Annual gas service  and inspection
Fire, smoke and CO2 alarm installs and maintenance 

Please feel free to point out anything I have missed as this is an entirely new feat. To be honest it's not something I even really want to do! 

greatcrested

lettingsnewsbie said:

greatcrested said:

You've mentioned tax, and mortgage consent. I assume you are aware of the other requirements and responsibilities...?

Please feel free to point out anything I have missed as this is an entirely new feat. To be honest it's not something I even really want to do! 

Since 1/10/15, new tenants must receive the 'Prescribed Information':
* government leaflet "how to rent"
* EPC (min E rating)
* Gas Safety Certificate if there's gas
* Smoke detectors on each floor
* CO alarm if there's solid fuel heating.
* From 1/2/16 landlords must check tenants' immigration status.
* furniture - certified fire-resistant
* electrics & electrical appliances - safe.
* Security deposit - registered & 'Prescribed Information' provided within 30 days of receipt. Failure has serious consequences. Never rely 100% on an agent.
* HMOs - special rules: check local council.

* Also read up on the Tenant Fees Act 2019.

greatcrested

Now check all the following links:

Books - Try your library. (Check publication date as laws change):
The Complete Guide to Residential Letting 2015 (also available here)
Successful Property Letting 2017: (How to Make Money in Buy-to-Let)
Landlordzone (Landlord information + forum)
Landlord Law (Property solicitor!!!8217;s website - clinic, blog, resources, advice etc) + Landlaw Law links (more links for landlords)
Shelter England (Tenants' rights) Shelter Scotland
Shelter (Repairs in private rented homes)
Gov advice (Renting out your home: government website)
HMRC (Property taxes eg Income Tax on rent (and allowable expenses to offset tax); Capital Gains Tax, etc)
HMRC (Non Resident [= overseas] Landlord Scheme)
Deposits (Payment, protection and return)
Deposits (Gov site: rules on deposit protection)
Prescribed Information (RLA links to various deposit schemes' documentation)
HSE (Gas Safety Certificate rules)
EPC (Energy Performance Certificate rules)
How to rent (mandatory government leaflet)
ESC (Electrical Safety Council - Rules)
The Smoke and Carbon Monoxide Alarm (England) Regulations 2015 (from 1/10/15)
Right to Rent (Mandatory checks on tenants' immigration status)
RLA (Residential Landlord!!!8217;s Association - mixed reviews)
NLA (National Landlord!!!8217;s Association)
Letting Agents (Tips for selecting, and tips for sacking them)
Letting agents (Landlordzone guide)
ARLA (Letting agents' professional body)
The AIIC (Association of Independant Inventory Clerks)
ParagonAdvance (Tenant referencing provider !!!8211; there are others. Use Google) Letsure
Landlord & Tenant Act 1985 (Repairing obligations; LL's address; and much more)
Landlord and Tenant Act 1987 (Address for Notices; etc)
Protection from Eviction Act 1977 (speaks for itself really. Also makes harrasment a criminal offence)
Housing Act 1988 (Definitions and rights of various tenancy catagories - note AST is most common; creates Statutory Periodic Tenancies)
Housing Act 2004 (Deposits; Houses of Multiple Occupation; etc)
Localism Act 2011 (section 184 - updates to deposit scheme rules)
Deregulation Act 2015 (amendments to deposit penalties & S21 service, smoke alarms, retaliatory eviction rules)
Statutory Instrument 2015 No. 1646 (Prescribed Information at start of tenancies from 1/10/15 - Deregulation Act)
Requirements for new tenancies since Oct 2015 (Stat Inst 1646 & Dereg Act)
Tenant Fees Act 2019 Abolition of most tenant fees from June 1st 2019 Gov Guidance Notes
Shelter information on 2019 restrictions on tenant fees.
Written demands (for rent etc: LL's actual address needed) Beitov Properties Ltd v Martin
Rent Increases (how and when can rent be changed)
HMOs (Licencing of Houses in Multiple Occupation in England: A guide for landlords and managers)
OFT356 (Unfair Terms in Tenancy Agreements)
Housing (Wales) Act 2014 (landlord registration & licencing)

lettingsnewsbie

Thank you, that's really helpful. Did i mention i really don't want to let our property?!! Maybe easier to just leave it empty 🤣