Accidental Landlord

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Accidental Landlord

    I bought a flat in 2003, then in 2010 bought a house and moved into the house. The sale of the flat fell through and I was unable to find another buyer. After 6-months paying for both the flat and house while looking for a buyer, the outgoings proved too expensive to sustain, so I had no choice but to rent out the flat until the market for selling flats in my area improves.

    My original mortgage was secured on both the house and flat, this gave me a good rate as my LTV ratio was <50%. This year I remortgaged but the new lender refused to secure the loan on both properties and instead preferred to have the loan secured on only the house, resulting in a LTV ratio of 70% and a poorer rate.

    Until the market improves, I figure I have a potential tax bill for the rental income. Will this be treated as an investment/income, as I've lost a lot of money on this already. By the time I eventually sell the flat I'll still be out of pocket despite the rental income.

    My mortgage is £1600pcm and the rental income £595pcm.

    #2
    You really need to get advice on this. You seem to have made a mistake removing the mortgage form the let property, as the interest you paid on that was allowable against tax. Obviously, maintenance and many other costs will remain tax allowable - but an accountant would be able to fine tune things to avoid as much tax as possible.

    The rental income (less allowable amounts) will be added to your other income and you will be taxed on the joint amount at your normal rate.

    You may also want to start drawing up some plans regarding CGT if you have your eye on selling the flat.

    Comment

    Latest Activity

    Collapse

    • Inheritance tax Open Market Vakue
      by Bengt Lagander
      Is a red book valuation an "open market value"?

      the Red Book, the RICS manual for valuers, the open market value ("OMV") is the best price obtainable in a transaction completed on the date of death.

      Is this the correct definition please?
      07-08-2022, 11:33 AM
    • Reply to Inheritance tax Open Market Vakue
      by flyingfreehold
      even with an RICS' firm's valuation, if the valuers at HMRC think it low they will still challenge it. Ive just dealt with an estate the valuation date for which was during lockdown, and with extensive tenanted interests. The RICS firm arrived at their figure by a completely different methodology...
      07-08-2022, 18:40 PM
    • Reply to Inheritance tax Open Market Vakue
      by Neelix
      A written valuation for probate from an estate agent or 2

      then after it’s sold you need to declare the actual value it sold for
      07-08-2022, 12:54 PM
    • Reply to Inheritance tax Open Market Vakue
      by Gordon999
      For assessing property value for estate tax, you would approach 2 or more surveyor firms for their valuation and choose the one who gives the lowest valuation.
      07-08-2022, 12:45 PM
    • Reply to Stamp duty question
      by Kekdal
      Thanks everyone I took professional advise from a qualified lawyer who confirmed that in my case I can't enjoy a lower rate. I kind of knew the answer but was clutching on straws . My oversimplified interpretation based on his advise is: HMRCs logic is if you have more than one property you pay higher...
      04-08-2022, 09:18 AM
    • Stamp duty question
      by Kekdal
      Hi Gurus,
      I am trying to figure out if I need to pay the 2nd stamp duty.
      I am buying a property which would be my main residence.
      I currently live in a property that I pay rent for as a tenant.
      However I own another property which I had bought to live in and had paid the lower...
      03-08-2022, 09:53 AM
    • Reply to Stamp duty question
      by DoricPixie
      The manual is clear, Kekdal will not be able to claim a refund if the BTL is disposed of after purchasing the new home. I don't know the circumstances the other posters to which you refer but they cannot be the same as Kekdal's as they would not be due a refund.

      I don't think it would be...
      04-08-2022, 05:44 AM
    • Reply to Stamp duty question
      by jpkeates
      I used to believe that as well - the HMRC manuals are pretty clear about the situation in my view.

      Which made the surcharge rules a real trap for anyone who owned a let property (maybe for some years) and, who then wanted to buy a home of their own).
      But some people claim to have...
      03-08-2022, 13:42 PM
    • Reply to Stamp duty question
      by DoricPixie
      Kekdal won’t be able to reclaim the higher rate of SDLT. That only works when someone buys a new main residence whilst keeping the old main residence, pays the higher rate of SDLT and then sells the old main residence within 3 years of completing the purchase of the new main residence. Then a claim...
      03-08-2022, 12:57 PM
    • Reply to Stamp duty question
      by jpkeates
      It seems to depend on the timing.

      I used to think that if you owned another property which you let, you were just screwed, because of the second property thing (even if it was your residence you were buying).

      I've been advised otherwise, and that you would pay and reclaim....
      03-08-2022, 12:11 PM
    Working...
    X