ChatterBank1 min ago
Paying Tax On Rental Income
6 Answers
Hi,
I'm about to move in with my partner. I want to rent my house out. If I rent it for example for £500 a month. and that is what my mprtgage is. Do I have to pay tax?
Thanks
I'm about to move in with my partner. I want to rent my house out. If I rent it for example for £500 a month. and that is what my mprtgage is. Do I have to pay tax?
Thanks
Answers
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You only pay tax on the profit.
If you rent your house out for £500 per month and your landlords building insurance is £50 per month ( just an example ) you will need to charge £550 per month to cover your expenses.
Any repairs or yearly checks are also classed as expenses. If you let through an agent they will charge you a management fee again an expense. So these charges would need to be included in your rent.
If you rent your house out for £500 per month and your landlords building insurance is £50 per month ( just an example ) you will need to charge £550 per month to cover your expenses.
Any repairs or yearly checks are also classed as expenses. If you let through an agent they will charge you a management fee again an expense. So these charges would need to be included in your rent.
You only pay tax at 40% when you net income after allowances is over £34,371. Up to that it is 20%. But as others have said it is the profit that is taxable so make sure you list the expenses of letting out the property against the income. Keep the receipts as may need to prove your case to HMRC.Hope you do not have any bad debts either.
People havent really given you pukka advice Scoobz
Yes you do need to declare it as an income - I think it is LP on your tax form.If you dont fill out a tax form you will need to as soon as you let.
Your rental income is 500 a month or 6000 a yr
against that you can chaarge well advertised expenses of running.
Legal fees, repairs but not improvements, hse insurance, maintaianece such as gas maintenance.
AND that part of your mortgage which is the interest element.
NOT the capital repayment part. Lucky at the end of every year you get a statement from your mortgage firm telling you which part is which.
So effectively if you have an interest only mortgage of 500 a month then you wont pay anything
otherwise you wil have to keep accounts..... which is not really a pain.
and remember to keep every receipt.
if you make a whacking great loss, then your tax bill is 0 and you cant carry over the loss to your earned income. Pity but there it is
I am not sure if you can carry it over from one year to the next I think the answer is no
If you make a profit - then you pay tax at the marginal rate, so if you are paying 40% you pay at 40% and if at 20% then 20% up to 31k as has been explained elsewhere and 40% the excess.
easy I dont know why more people dont do it
From t he figures you have given you can pay the rent tax on your employed PAYE income.
Yes you do need to declare it as an income - I think it is LP on your tax form.If you dont fill out a tax form you will need to as soon as you let.
Your rental income is 500 a month or 6000 a yr
against that you can chaarge well advertised expenses of running.
Legal fees, repairs but not improvements, hse insurance, maintaianece such as gas maintenance.
AND that part of your mortgage which is the interest element.
NOT the capital repayment part. Lucky at the end of every year you get a statement from your mortgage firm telling you which part is which.
So effectively if you have an interest only mortgage of 500 a month then you wont pay anything
otherwise you wil have to keep accounts..... which is not really a pain.
and remember to keep every receipt.
if you make a whacking great loss, then your tax bill is 0 and you cant carry over the loss to your earned income. Pity but there it is
I am not sure if you can carry it over from one year to the next I think the answer is no
If you make a profit - then you pay tax at the marginal rate, so if you are paying 40% you pay at 40% and if at 20% then 20% up to 31k as has been explained elsewhere and 40% the excess.
easy I dont know why more people dont do it
From t he figures you have given you can pay the rent tax on your employed PAYE income.
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