Tax on only owned property, letted out on repayment mortgage?

[jinny1]

Hi
I wondered if anybody could advise on what sort of taxes/allowances I need to familiarize myself with in the following circumstance:

I own one property which I lived in for 11 years. I am shortly to be made redundant, and have let the house out because I couldn't sell it. The rent does not cover the mortgage, which is repayment - £300 short. I looked into changing the mortgage to interest-only and was refused because there is insufficient equity (but I do have a consent to let from my provider). I will probably sell the property down the line when I can. I do not own or rent another residence.

I'm struggling to figure this out because much of the information I can find assumes buy-to-let mortgages and that the property is a second one. Any advice on my tax situation here would be greatly appreciated!! Cheers.

[Telometer]

I'm struggling to figure this out because much of the information I can find assumes buy-to-let mortgages and that the property is a second one.

It makes no difference.

You pay tax on the difference between income received and expenses. Remember the repayment element of the mortgage is not tax deductible.

[Gordon999]

To understand your tax on income situation, you need to calculate your "total income" for 2011-2012tax year including estimated earnings from your job and profit from rental of property.

The rental profit = 12 months rent - 12months mortgage interest - buildings insurance - cost of repairs - letting agent fees -bank account charges etc. If the profit is actually a loss , then the loss is carried forward to next year .

The total income less personal allowance ( 7450 ?) becomes liable to income tax.

When the property is sold, there may be liability to CGT but you are exempt for the period under own occupation + a further 3 years from date you moved out.