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Comments
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When you say the mortgage is £370, is that just interest, or is any part of it going to repay some of the amount borrowed?I don't quite understand.
The rent is 450
The mortgage is 370
The letting agent fee is say 40
sorry to sound silly its just very new to us.
Only the part paying interest cab be used to offset allowable expenses.
In the next few years, the mortgage interest is going to be restricted which will affect higher rate taxpayers.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
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in respect of mortgages ONLY THE INTEREST component is an eligible expense when calculating the net taxable profit.
there are dozens of websites covering how to calculate the net taxable profit from letting ("renting out") a property, this is the obvious start point since it is on the .Gov website (dumbed down guide):
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
if/when you need more detailed advice then HMRC has rather a lot of info on what can and cannot be claimed as a cost given the period up to 20/21 has transition rules if you are a higher rate taxpayer (if you are a basic rate taxpayer nothing has changed):
https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords
and the full info is in the manual:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual0 -
Now that your query has been answered (thanks 00ec25), how clued up is your partner on the other aspects of his business?0
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that is the second time you have posted such rubbish
in respect of mortgages ONLY THE INTEREST component is an eligible expense when calculating the net taxable profit.
there are dozens of websites covering how to calculate the net taxable profit from letting ("renting out") a property, this is the obvious start point since it is on the .Gov website:
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
if/when you need more detailed advice then HMRC has rather a lot of info on what can and cannot be claimed as a cost given the period up to 20/21 has transition rules if you are a higher rate taxpayer (if you are a basic rate taxpayer nothing has changed):
https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords
and the full info is in the manual:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual
What? Read it again, I said you declare the income, then deduct expenses.
You don't declare the profit then deduct expenses.0 -
I have edited my post so as not to accuse you, however, for posterity, what you actually said was far from clear given what you stated was "income, not profit"What? Read it again, I said you declare the income, then deduct expenses.
You don't declare the profit then deduct expenses.You Declare the full amount received and then deduct the relevant expenses.
income, not profit.0 -
I have edited my post so as not to accuse you, however, for posterity, what you actually said was far from clear given what you stated was "income, not profit"
Which was quoting this:
Originally Posted by pbsmiles
When you say declare income, what would be classed as the income the whole monthly rent or the rent less the mortgage and estate agents fees?
- in context it makes perfect sense.
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LOL- in context it makes perfect sense.
you did not quote the context
you posted the random comment "income not profit"
to quote a comment you :
1. hit the quote button
2. use the delete button carefully to edit out extraneous verbage
3. post
so, for example, your comment above has been edited thus to remove unnecessary words, spaces, and several lines of irrelevant on/off italics commands that do nothing:[STRIKE]Which was quoting this:
Originally Posted by pbsmiles
When you say declare income, what would be classed as the income the whole monthly rent or the rent less the mortgage and estate agents fees?
[/STRIKE]
- in context it makes perfect sense.
[STRIKE]
[/STRIKE]0 -
Declare income, deduct any allowable expenses (this is shortly to change to no longer allow mortgage interest I believe)
Correct, phased until 2020. if the OP doesn't understand the basic concept I'm not even going to attempt to try and explain the ramifications of that one.
I would suggest they employ an accountant or at the very least take advantage of a free half hour with one.0
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