what amount would you be taxed on?

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

  • what amount would you be taxed on?

    I am new to this and have a complicated situation... I have a property with a buy to let mortgage on, my mam has a mortgage free property. We would like my mam to be able to rent out her property for say £500/month, then if she paid me the same rent per month would she be taxed on her rent? what would be the calculation for offsetting tax against interest etc?

  • #2
    I'm not an expert, so seek more qualified advice but my understanding is:

    You would both be taxed on the £500 a month (but not if any other earnings added to this didn't exceed the personal tax threshold). You can claim tax relief on your buy to let mortgage.

    Comment


    • #3
      1. Your mam's rental profit = 500 x 12 = 6000 pds minus house insurance , repairs & maintenance etc.

      2. Her tax will be calculated as " annual income from work" plus "rental profit" minus "personal free allowance at 8105 pds" = income taxable at 20% or 40% rate.

      3. Your own "rental profit" will be further reduced by annual interest on your mortage.

      Comment

      Latest Activity

      Collapse

      • First Time Self-Assessment: Help please
        Matt_J
        Hi All,

        I am in the process of registering for Self-assessment to declare the income and pay the tax on my property for tax year 16/17.

        I understand I don't actually need to do this until October 17 but I need to do now as I need to borrow against my residential mortgage, and...
        26-07-2017, 12:06 PM
      • Reply to First Time Self-Assessment: Help please
        jpkeates
        If you do the return now, HMRC will work out how much tax you owe - if you do it after the end of September they make you do it yourself (I think that date's right).

        Personally I pay an accountant to do the return and make sure I'm not paying too much tax. Costs me a few hundred quid (which...
        26-07-2017, 13:34 PM
      • Reply to First Time Self-Assessment: Help please
        AndrewDod
        Even if you could pay yourself (which you cannot) you would have to declare that payment as income and pay tax on it.

        Get decent tax software. I use Taxcalc.
        26-07-2017, 12:58 PM
      • Reply to First Time Self-Assessment: Help please
        Matt_J
        Sorry 1 more question as well. Do I need to work out my tax liability myself for the self assessment? Or do I just plug the numbers in the website and HMRC work out how much I owe?

        I am not self employed and pay 40% tax on the top end of my salary earnings via PAYE.
        26-07-2017, 12:36 PM
      • Reply to First Time Self-Assessment: Help please
        Matt_J
        Thanks for you response, I appreciate it.

        My question about the accountant fees was because I am a qualified CIMA chartered management accountant - but obviously not an expert in tax, hence my questions! So even if I am an accountant myself and could justify a rate, I still couldn't deduct...
        26-07-2017, 12:33 PM
      • Reply to First Time Self-Assessment: Help please
        jpkeates
        There no wear and tear allowance for the 2016/17 tax year.

        New tools are a capital cost rather than a revenue item - replacement tools might qualify, but in both cases have to be wholly and exclusively for the rental business, which isn't easy to prove if challenged.

        No, you...
        26-07-2017, 12:15 PM
      • New government tax legislations
        Damo-h666
        Hi thinking about buying my first buy to let property. With the new government tax legislations proposed to hit us by 2020 is it actually worth it. I would be repaying the capital aswell as the interest. Am I right in understanding that the government will tax me on the full rental income and not just...
        25-07-2017, 14:38 PM
      • Reply to New government tax legislations
        tatemono
        I wish ...
        26-07-2017, 09:23 AM
      • Renting below market rate
        insightforthe
        Hi,

        I having been renting out a property i have, to a mate, for below market rate. Last year for a couple of months, i received less rent than agreed due to unforeseen circumstances.

        So I should have received £17400, but only received £15,400, so I am in deficit of £2k....
        21-07-2017, 23:28 PM
      • Reply to Renting below market rate
        Gordon999
        I suggest you declare whatever is received in your bank account. Its becomes a pain to declare a higher figure which you did not receive and have to pay tax on it. There are many one year rental agreements with option for tenant to leave after 6 months. There are some rentals where the tenant makes...
        26-07-2017, 08:35 AM
      Working...
      X