Let out my home and move into a rented property

[Mandy2007]

Because of the market, I am unable to sell my current property. Instead, I am going to move to a rented property. To offset the cost, I’ll have to let out the current property. If there is any rental income from the current property, do I need to fill in tax return forms? How about the cost I spend in the rented property? It is likely that I’ll spend at least £300/month more for the rent in addition to the mortgage payment on the existing property.

[TaxationPete]

Yes you will need to inform HMRC and declare the rental income/loss as appropriate. The Mortgage interest (Interest 'only') will, with other expenses, like gas safety certificate, property insurance etc etc will be deductible from the gross rental income. Remember you must obtain permission from the mortgage provider to rent it out as it is a change of use. Regards Peter

[Mandy2007]

Thanks for the reply. How about the cost in alternative accommodation? It is not a profitable move. But people have to let out their home for all kinds of reasons.

[King_Maker]

No, the cost of altenative accommodation is not deductible.

Although now withdrawn (and subsumed into the Property Income Manual), HMRC's booklet IR150 on the Taxation of Rents is still useful.