Away for year, so letting-out house; what tax to pay?

[Pixie36]

Hi. I am new to all of this and very confused. We have a house which we would like to rent out. We plan to take a year out to travel around the UK with our caravan. We have been saving hard so I will only need to work a few months during the next year. Hubby wont work at all. The rent will be £5,400 per year with about £2,400 left after mortgage payments and insurance. Because this income is less than our tax code allows us to make then will we have to pay tax? Will we need to fill in a tax return? We might go to Europe for a few months. Will this affect anything?
Any questions please ask.
Thanks

[Smiler]

You can't offset your mortgage payments but you can your mortgage interest payments.

If you look back you will see what else you can offset.

[Poppy]

You will definitely need to complete a self-assessment tax return including a land and property page at the end of the tax year.

[jeffrey]

You can't offset your mortgage payments* but you can your mortgage interest payments.

If you look back you will see what else you can offset.
*- this means 'repayments of capital' (if the mortgage conditions state that each month's payment is split between capital and interest).

[SALL]

You will have to complete tax returns, but if your total income for the year is below your tax code, then there should be no tax to pay.

[TaxationPete]

Assuming the property is jointly owned then you are deemed to own it 50/50 and you will both need to complete SA100 and the property pages SA105 each year. You will need permission from your mortgage provider to rent the property out and the insurance company must be informed. You will need a gas safety certificate and mains powered smoke detectors, you should also have, but not a legal requirement, an electircal compliance certificate. ( every 5 years, Gas annually ) You may also have to inform the LA. Regards Peter

[Telometer]

you need mains powered smoke detectors

Utter nonsense.




you should have an electrical compliance certificate

No you should not. Indeed, there is no such thing.

Damage done to electrical systems breaking connections in order to test them more than outweighs the potential risk of an electrical system that is left well alone.



As for tax; you will have to add any employment income you make to your share of income from the house. It may make sense - though the numbers are so small it hardly seems worth it - to split the share in the house so your husband has 99% if he will not be earning. Going to Europe for a few months will make no difference. If you plan to be self employed, rather than employed, you will need to register with HMRC thus.

[TaxationPete]

Your right Telometer, they can actually be powered from a DC battery backed up sytem like a security alarm. Many LA's now insist on this and your insurance company when you change the use to a rental property, and rightfully so. Just for you :
http://www.landlordzone.co.uk/fire_safety.htm
Regards Peter

[Telometer]

That link is full of rubbish, and must therefore be assumed to be of no use whatsoever.

[TaxationPete]

Should there be an accident in the property related to an incorrectly earth appliance and no compliance certificate in place then the LL can be held directly responsible in a court of law. Regards Peter

[Telometer]

No sane electrician would issue a compliance certificate unless he had, just that moment, fitted the installation.

For to do so would be like an auditor stating that a set of accounts were accurate, rather than T&F.

There is a requirement for certification following the completion of certain electrical works, in accordance with the requirements of Part P of the Building Regs. Such certification applies to the work undertaken, not the system as a whole. No sane electrician would provide such a certificate in respect of work undertaken by another party.

Did you mean a PIR?

[TaxationPete]

No. Regards Peter