what amount would you be taxed on?

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    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?

    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.


      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.


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