Tax on rented house

[Paul.Todd]

I need to shift away for 18 months or so. I am in the UK and the job will be in the UK.

I need to rent out my existing house (which is mortgaged) and rent an apartment.

I have been unable to find out if I can claim tax relief on the interest for my mortgage.

I am already a higher rate tax payer and paying £250 extra a month for the priviledge of renting it out seems a bit steep.

[Chartered Tax Adviser]

Obtain a valuation of the property immediately prior to letting it out. Keep this safe.

You can claim tax relief on interest on a loan up to the value of the property when you start to let it out (although I appreciate you may struggle to find a lender willing to lend up to 100% of the value !).

It is also possible to borrow more if you are not up to 100% borrowings and spend it as you like. Higher rate tax relief on interest to pay for:-

- a new car ?
- school fees ?
- a holiday ?
- christmas ?

HM Revenue & Customs manual says this is OK !

Feel free to contact me for more advice. First discussion/meeting (within reasonable distance) free. Make sure your affairs are looked after by a Chartered Tax Adviser.







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The above is for the information of readers. Whilst every effort is made to ensure accuracy, information contained may not be comprehensive and recipients should not act upon it without seeking professional advice.
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[Tax Accountant]

I need to shift away for 18 months or so. I am in the UK and the job will be in the UK.

I need to rent out my existing house (which is mortgaged) and rent an apartment.

I have been unable to find out if I can claim tax relief on the interest for my mortgage.

I am already a higher rate tax payer and paying £250 extra a month for the priviledge of renting it out seems a bit steep.

I do not understand your comments about ''paying £250 extra for the priviledge of renting it out''.

If this is the rent for your new apartment, this surely is for you to live in and not for the priviledge of renting out your home.

Yes, the interest is fully allowable as an expense of your letting income. You need to notify this new source of income to your tax office within the required time limits, although if you are already completing self-assessment tax returns, this is not a priority.

You need to keep the CGT position in your mind. If you return to the property as stated, there is nothing to worry about. But you may not return to the property or indeed decide to buy another property in your new place of work and use it as your residence. In these circumstances it may become relevant. But no need to go into full details at this stage as it is irrelevant at this stage.

Ramnik