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chakras
29-11-2011, 09:46 AM
I am new to the renting out business, but it has become necessary as I have had to move back in with my mother who has vascular dementia.

I pay a mortgage on my house but have permission from the lender to rent it out for two years. The mortage is a repayment mortgage only. I have stayed in the house myself ( sole residence ) for around 6 years.

However, the fixed rate term is actually up before that date , so I would reckon at that time, I will need to switch to ' buy to let ' mortgage ?

I am getting very confused as to tax allowances.

I know that I can deduct agents fees. insurance etc off the rental income for tax purposes, but can I also deduct the mortgage I am paying on the house and basically using the rental income to pay this ?

I am also very confused as to the whole capital gains system, should I sell the house in the future. Can anyone help ?

Telometer
29-11-2011, 10:57 AM
If you are living in your mother's house and are away for less than three years there is no CGT impact provided you move back in for a respectable length of time in order to prove you are permanently back there, say a year (less if circumstances suddenly change).

For income tax you offset mortgage costs as well.

Just because the fixed rate is up does not mean you have to switch your mortgage.