What portion of rental income is taxable?

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    What portion of rental income is taxable?

    Hi I am about to let out my property and I,m new to taxation.

    Please can someone tell me what part of rent received is taxable?

    For eg:

    My mortgage is £400 pm
    Letting agent fee £50pm
    Rent received £700pm

    I want to put £400 back every month to pay the mortgage.

    How does it work.

    Thanks

    #2
    Of that £400 mortgage payment each month, how much is interest and how much is capital repayment?
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
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    Comment


      #3
      It's about £80 interest per month and the rest is capital.

      Thanks

      Comment


        #4
        You can only claim the Interest NO capital is deductible from the Rental income. I suggest you but a couple of good books on the subject.
        I assume you have permission for the change of use from your mortgage provider, it is a requirement in the T&C's and failure to do so can lead to the property being repossessed.
        Do you have a gas safety certificate ( LAw ) and Electrical Certificate ( recommended every 5 years ) Regards Peter

        Comment


          #5
          Hi, yes I have consent to let from my lender and its all sorted. So the capital portion of my rent will be taxable?

          Comment


            #6
            Originally posted by midiman View Post
            So the capital portion of my rent will be taxable?
            Errr... the capital portion of your mortgage isn't tax deductible.

            Comment


              #7
              I'll put it another way for you. The capital payments to your provider has nothing to do with your rental business. Only the 'Interest' element is deductible from your gross rental income. Regards Peter

              Comment


                #8
                Surely this depends on his overall income and tax band?

                If this is all income then a higher rate tax could apply.......No?

                Comment


                  #9
                  Pardon. ?? Regards Peter

                  Comment


                    #10
                    Well, Peter, I will of course take guidance from you, but....we run a number of rental properties as a company for which we pay all the relevent tax etc, then I also have a day to day job which pays reasonably well, I now own my parents house which I thought about renting out, however I am told that any income from that property will class as additional earnings and hence, taxable income, I am alreaday a high rate tax payer so this just adds to it?

                    Or am I going mad?

                    Thanks.

                    Spark

                    Comment


                      #11
                      Income Tax, succinctly named.
                      I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

                      That also means I cannot share in any profits from any decisions made!

                      Comment


                        #12
                        Are you married?

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