Midlife......

iTrader: (2)

I know there are a fair few landlords and tax people on SN so any help would be welcome

It's a long story but we can't sell our house and move

so we are thinking of renting out our house and then renting a similar property where we want to live and wait for the the housing market to pick up again LOL

Just a couple of questions

1. The letting agent said that the rental income from our house could be offset against the rent we would have to pay on our new rented house ......so we would pay no tax on the rent from our house. I'm not sure on this one as I'm sure HMRC would simply tax this as income.

2. Can I have the rent for our house paid to my wife who doesn't work to get her tax allowance ?

Cheers

Shaun

PS what about NI payments ?

Diesel

1. I doubt you can easily offset outgoing rental costs against any rental income. Just imagine...

2. Depends who legally owns the house....

(3) No NI payments on a house! NI on an individual's non PAYE's tax return - possibly.

You need an accountant mate (not my layman basic advice)

D

Midlife......

iTrader: (2)

Diesel

Our house is in joint ownership.

I'm sure the taxman will simply see any rent as "earned income" and take whatever he wants

Shaun

Diesel

Ohh and every penny you spend on the business is tax deductible... You have to save receipts and put them on a tax return (acountants help and advise here!) D

Deep Singh

sean, I'm no expert but

1) You cannot offset the rental you are paying against the rent you are earning (99% sure on this)

2) You can offset the interest portion of your mortgage against the rental income (if you have a mortgage)

3) You can also offset any maintenance costs and agents fees.

4) You can take advantage of your wifes tax status. If the house is in joint names I presume only half the rent would be allowed to be apportioned to her. You could also pay her say 10% of the rent for looking after/inspecting the property for you regularly (ie employ her). so now she gets about 60% of the rent, 10% will be written off for maintenance so you will pay 40% tax on 30% of the rent.
Thats assuming you have no mortgage, if you do as mentioned you can offset the interest portion of that aswell.

The other option (only if you have no mortgage and therefore there is no lender to object) is transfer it 100% into your wifes name. Inter spouse transfer is quite easy

salsa-king

the rent you get will be taxable, but you can offset anything you spend on maintance ect on the house against the tax.

never heard you can offset the rent you'll pay.. best check with your accountant.

I think its a better idea to get your wife, if she has the heigher tax threashold than you, to pay the tax on it.... speak with your accountant again, as thereds many ways to off set things.



Deeps, really said what i'd say.

but, if you're on a 'normal' mortgage and not a Buy To let, be careful with your mortgage lender, as if they know its rented out you're %rate might go up, cus if you need to be reposseded, they then have the hassle of evicting a sitting tennant.. that YOU put in there!

Midlife......

iTrader: (2)

Thanks for the help

It looks like the idea of renting out our house for £800 a month and moving to another house in a different part of the country with a rent of £800 a month isn't going to be a simple "swap"

The Taxman and the letting agents look like the only winners

I don't have an accountant as I've been PAYE since 1982 LOL

Back to square one LOL

Shaun

salsa-king

don't worry about PAYE, that's what I', on too, you get the self assesment form thats for land and property, get an account to do the rest, he will be able to offset things for you that you might not even know you can, also it doesn't effect the PAYE.

Diesel

You OFFSET costs against tax- its not ever a 100% refund. You just dont pay tax (say @ 30%) of what you spend to make a living/income.

I really think a good accountant could work something out mate - dont give up. Phone a few with your plan to seewhat they suggest - INTERVIEW them...

D