what amount would you be taxed on?

  • 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.


    • #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.


      Latest Activity


      • First Time Self-Assessment: Help please
        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
        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
        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
        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
        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
        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
        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
        I wish ...
        26-07-2017, 09:23 AM
      • Renting below market rate

        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
        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