Tax on Rental Income

Jules48_2

Hi

I have a property which is rented out on a six month lease. Originally I lived in this house but purchased another property with the aid of an interest only mortgage .The mortgage is on the house I now live in. Is it true that I can offset the cost of the mortgage against the rental income? My mortgage is £680 per month and the rent from my tenant is £550.

Any advice would be appreciated

bobby-boy_2

NO, you can offset the INTEREST ONLY of your Rental property only against the income as well as 10% of the rental income for "wear and tear" if you do not want to do itimised re-decoration / furniture replacement. Also any letting agets fees are tax deductable as are advertising costs. I got a book frm HMRC listing all the rules not the most riviting read but some good stuff in there.

gld73

I'm in a similar situation - I'm moving house, so am renting out my old one and having a residential mortgage on the house I'll be living in. However, the advice I got from a mortgage broker is that to claim tax relief on the mortgage, it needs to be on the house I'm renting out - so I'm in the process of taking out a Buy to Let mortgage on the 1st house, using the lump sum I get from it to pay off a big chunk of my residential mortgage, and will claim the tax relief on the BTL mortgage.

Bungarm2001

You can offset all the interest payments of a BTL mortgage on a rented property only if THAT was the property you bought with the BTL...in others words, no, you can't offset any part of the resi mortgage on the property you live in against the rented property.

Sorry if that isn't too clear...it's getting late and it's been a loooong day! _pale_