Tax allowable expenses as a landlord

3PurplegreenCats

I need to live closer to where I work, & am considering renting out my current home temporarily (I own it outright) & renting a property to live in myself until I can find something suitable to buy. I’ve just spoken to a lettings agent who seemed to think that my own monthly rent cost would be a tax allowance expense; anyone know if that’s the case?

GDB2222

3PurplegreenCats said:

I need to live closer to where I work, & am considering renting out my current home temporarily (I own it outright) & renting a property to live in myself until I can find something suitable to buy. I’ve just spoken to a lettings agent who seemed to think that my own monthly rent cost would be a tax allowance expense; anyone know if that’s the case?

No, it would not.

3PurplegreenCats

Thanks - didn’t sound right to me either.

Dazed_and_C0nfused

3PurplegreenCats said:

Thanks - didn’t sound right to me either.

You can't even claim loan interest on money borrowed to finance a BTL as an expense anymore nevermind costs relating to another property!!

sheramber

Definitely not.

Allowable exxpenses must be solely and exclusively for use in the business.  Your private rent does not qualify.

theartfullodger

No.  Nope.  I'd not go near that agent again - they either know the law but are lying, or are ignorant of the law.  Either ain't good.

Ask them to show you either the law or the HMRC guidance that says it's ok.

There was iirc a test case regarding an actor - the great Tim Healy - , but think that was when he was temporarily working away from home as the sole reason, 9 months.

macman

The worst scenario is a accidental landlord and an incompetent agent, if you are going to get into this market. Though why you would at the worst possible time puzzles me.
What happens if you find somewhere to buy and your tenant decides not to vacate in the 2 months notice period you give them under an S21? It could then take at least 6m to evict via a possession order, by which time your vendor will most likely have lost patience and sold to another buyer.
You'd probably get the same return after LA fees by putting the funds from sale in an instant access account at near 4%.

steve866

It would be nice if this was allowable but it is not (e.g. some sort of allowance if you let out your only home and rent elsewhere). One of the downsides of home ownership. I wanted to move to a different location for 12 months but it didn't stack up financially due to the tax

kingstreet

Dazed_and_C0nfused said:

3PurplegreenCats said:

Thanks - didn’t sound right to me either.

You can't even claim loan interest on money borrowed to finance a BTL as an expense anymore nevermind costs relating to another property!!

That's kind of half-right. You can claim a tax credit of 20% of your mortgage interest effectively limiting the value to higher rate tax payers.

Dazed_and_C0nfused

kingstreet said:

Dazed_and_C0nfused said:

3PurplegreenCats said:

Thanks - didn’t sound right to me either.

You can't even claim loan interest on money borrowed to finance a BTL as an expense anymore nevermind costs relating to another property!!

That's kind of half-right. You can claim a tax credit of 20% of your mortgage interest effectively limiting the value to higher rate tax payers.

Or making a basic rate payer a higher rate payer.

Or adding to HICBC

Or increasing the taper on the Personal Allowance etc etc