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.


    Of that £400 mortgage payment each month, how much is interest and how much is capital repayment?
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      It's about £80 interest per month and the rest is capital.



        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


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


            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.


              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


                Surely this depends on his overall income and tax band?

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


                  Pardon. ?? Regards Peter


                    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?




                      Income Tax, succinctly named.
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