Tax Advice when renting out a property.

WRScott

Hi all I could do with some advice around buy to let.

My first question is if I buy a property with savings can i offset income against the amount I invested ?

eg Say i put in £30k savings can i repay the £30k back to a savings account from rental income .
The way i’m looking at it is i’ve not made any profit until i get my capital back.

grumpy_codger

WRScott said:

My first question is if I buy a property with savings can i offset income against the amount I invested ?

eg Say i put in £30k savings can i repay the £30k back to a savings account from rental income .

No.

You can repay after paying the income tax - if it's due.

MSE:

Tax rates 2024/25: tax bands explained

 

FlorayG

No. You pay tax on income, which is the rent. You can offset money you spend ON the house to bring it up to standard after you've bought it but the amount you invest in it initially doesn't count
Then when you eventually sell it you pay tax on the profit, so they've got you coming AND going 

theartfullodger

There are more than 10 taxes a landlord may have to pay.  May I humbly suggest you get a book on property tax and read it - saving time and money.

Worth widening your thinking - in particular IHT, CGT, CT....

Mr.Generous

WRScott said:

Hi all I could do with some advice around buy to let.

My first question is if I buy a property with savings can i offset income against the amount I invested ?

eg Say i put in £30k savings can i repay the £30k back to a savings account from rental income .
The way i’m looking at it is i’ve not made any profit until i get my capital back.

That would be nice, and fair too. But unfortunately not. If you buy a wreck and renovate to habitable standards you cannot offset those costs either, they can be set against CGT when (if) you sell the place. HMRC do free webinars on a few aspects of tax for landlords, free training and always up to date.

Bookworm105

WRScott said:

Hi all I could do with some advice around buy to let.

My first question is if I buy a property with savings can i offset income against the amount I invested ?

eg Say i put in £30k savings can i repay the £30k back to a savings account from rental income .
The way i’m looking at it is i’ve not made any profit until i get my capital back.

I suggest you employ an accountant if you do let property as you are not beginning from ground zero, you are beginning from deep under base level knowledge.

There are thousands of websites that explain it all, please read them rather than trying to learn by drip feeding single questions, here are some to get you started:

Work out your rental income when you let property - GOV.UK

How rental income is taxed - Which?

Property Income Manual - HMRC internal manual - GOV.UK

and here is a guide for those who can't read

HMRC email updates, videos and webinars for landlords - GOV.UK