Rental Income and Tax

boybeck

I am about to rent my house.

Once I have paid my buy-to-let interest only mortgage and buildings insurance with the rental income, I am left with about £35 a month.

Should I be paying tax on this?

Gorgeous_George

Yes, you pay tax on income. However, there are many more things that you need to understand about tax returns.

You can discount 10% of the rent against wear and tear for starters.

It would be worthwhile checking on everything and getting the tax return right as losses can be carried forward to future years.

GG

EdInvestor

You can also claim for agent's fees, repairs and maintenance costs, 10% wear and tear if you let furnished, and any other expenses incurred in pursuit of your letting business.Probably by the time you fill in your Self Assesssment tax return (you need the Land page), you will have incurred a few bits and bobs sufficient to soak up the extra income so no tax will be payable.

tbs624

Now come on GG - don't be all mysterious;)

Boybeck - you could have a look here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/index.htm

and also the HMRC website SA105 Land and Property guidance

It's pretty straightforward once you've read through all the appropriate blurb, and you can always post any further queries here or have a look on LandlordZone.

boybeck

Thanks for all the info.

So do I need to fill out a tax return, even if that £35 can be covered by wear and tear?

I am letting the house unfurnished.

Gorgeous_George

Yes, you need to declare your losses.

GG

boybeck

If I am already taking account of an interest only mortgage. letting fees and building insurance, what expense could I use for getting out of paying tax for the remaining £35 a month?

If the house is unfurnished, can I still claim for wear and tear?

tbs624

boybeck wrote: »

'...If the house is unfurnished, can I still claim for wear and tear?

The wear and tear allowance can be used for properties where you have supplied furnishings or equipment. If you look at the links given above, all will become clear...

Gorgeous_George

You can offset travel costs. I claim 40p per mile for two visits to my property per year.

I'm sure all the info is out there either on this sitre or Landlordzone.

GG