MegaSack DRAW - This year's winner is user - rgwb
We will be in touch
I wonder if there are any tax self assement experts out there.....
We own (when I say own, we have a mortgage for) one house we lived in for quite a few years. Then when we needed to move for job reasons and couldn't afford to buy where we needed to live, we rented out our house and then rented another for similar money where we needed to live. we don't own any other property.
Although paye employees we fill in a self assesment tax return because of the house and it never used to be an issue as the "business" always made a loss as the interest on the mortgage, agent fees, insurance and maintanence always came to more(just) than the rent we got. But now with interest rates so much lower at the moment the "business" is making a profit and we'll be liable for a sizable tax bill next year I'd guess.
My question is - if you only own the one house and the only reason you can rent it out is you moved out and pay rent elsewhere - can you claim some or all of that rent against the self assesment for the house you own?
It seems a little illogical to me if not- though I'm sure you probably can't. Our incomings and outgoings are just the same as if we still lived in the house its just someone pays us rent and we pay it back out to someone else. With many folks in a similar position moving around the country to keep themselves in employ in these strained financial times, I can't believe we are in a unique position.
My question is - if you only own the one house and the only reason you can rent it out is you moved out and pay rent elsewhere - can you claim some or all of that rent against the self assesment for the house you own?
No.
But you can look into appropriate deductions against the rental income such as:
* Building and contents insurance
* Agency fees
* Legal and accountants’ fees
* Mortgage interest
* Utility bills
* Miscellaneous costs like phone line and internet use.
http://www.simplybusiness.co.uk/knowledge/articles/2010/02/2010-02-18-keeping-buy-to-let-records-for-tax-returns/
You may also be able to make a 10% on rent allowance for wear and tear on furnishings if you let out your property furnished.
http://blog.propertyhawk.co.uk/2009/01/buy-to-let-tax-wear-tear-allowance.html
Thanks Stoner. I have got most of those aspects covered.
It was the status as sole house owner that I'm trying to explore if there are any unusual "loopholes". Most of the blurb on the web is written for the buy-to-let market which assumes the buy-to-leter own and lives in another house (or is renting out a room in the house they also live in). I wonder how many landlords rent the property they live in themselves?
There are a few differences in my situation to a "normal" buy to let landlord - for example if I was to sell the house, even though its rented out, as it’s my only property I would not have to pay capital gains on it, even if I hadn't lived in it (which we have). I guess I was hoping to find another one to avoid some of the tax.
I could go to an actual accountant - at least that would be a cost to offset!
I don't think they're that bothered whether you own/mortgage/rent the one you're [i]living[/i] in, the fact is you have to pay tax on the nett profit of any house that you earn income from. Full stop. This [i]is[/i] HMRC after all
but having said that, if/when you sell the house you're letting, there are Capital Gains allowances against the length of time that you actually lived there, should you make a profit on the sale of the house