RB5320

I have just moved in to my girlfriend's house and am intending to rent my house out. I assume that I will have to pay tax on the income, but have been told this may not be the case. Can anyone confirm one way or the other? Thanks.

Steve

MarkO

You don't pay tax on any of the rental income which is used to pay off a mortgage. So if you have any other mortgages (e.g., your girlfriend's one) max out the mortgage on the rental property, and use the cash to pay back some of the other loans. That way you'll maximise the tax relief across your loans.

Tiggs

just make sure she doesnt then dump you!

blair

You can use the *interest* that you pay on the mortgage as an "expense" to reduce the taxable profit on renting out the property.

You can also claim 10% of the rental income as a wear and tear allowance against the rental income.

Other costs like agents fees etc can also be offset.

There are some capital gains tax implications if the property is let out for more than 2 years but I can't remember the details

I think there is info on the Inland Revenue website somewhere

Andy

RESSE

iTrader: (1)

"Rent a room relief"

There is a special relief available to an individual who receives payment for letting furnished accommodation in a qualifying residence. The relief provides total exemption from income of £4,250 unless sums accrue to another person in respect of lettings in furnished accommodation in the same property.

A qualifying residence is a residence that is the individual's only or main residence.

Tax Act 1988.

RB5320

Thanks very much chaps. Tiggs - thats why I am renting, not selling!!!