rental income only just covers mortgage interest.still tax deductable?

[maggieann]

hi
glad to have found this forum!

I have moved out of my family home and remarried. my daughter is staying on with her fiance, and is hoping to pay me a minimal rent just to cover the interest only mortgage. she hopes to save to buy the house in the next couple of years. I have read info on hmrc site stating interest is an expense I can claim against tax. as i will only be receiving £120 p.m which covers interest, am i still allowed to claim this allowance? i.e I won't actually be earning anything!

many thanks in advance

[Telometer]

Yes. If you aren't earning anything you have no tax to pay.

As you are letting below market value, you will not be entitled to carry forward any surplus losses.

[maggieann]

many thanks for the swift reply. so there are no rules stating that i have to charge a market rent ?
young people have it so hard in the housing market these days.

[jeffrey]

No, there's no legal obligation to charge a market rent ("rack rent").

[maggieann]

that's good then!
was a bit worried that this tax situation was similar to the cgt situation i.e even if you give away property, you may still have to pay cgt on the market value even tho no money changed hands, as i understand it.