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Self Assessment, Tax On Rental Income

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JustABobIsMe | 20:31 Sun 26th Nov 2023 | Business & Finance
20 Answers

Filling in my 1st self assessment tax return.

Is it right that I have to pay tax on the whole amount of rent I receive from a tenant although once you take out the mortgage & insurances I'm actually left with about £100 a month to take care of any maintenance issues ?

Am I really going to be taxed on money I never see ? 



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As far as I'm aware, you're taxed on the profit you make.

Question Author

I can only see where to put the total figure for the rent paid to me after the letting agent fees, ie. Total UK property income, then nowhere I can put the mortgage payments.

you can offset expenses there'll be another box for that. Mortgage interest no longer allowed.

Question Author

Ahh, or do I take the mortgage payments off the Total UK property income figure ?


Expenses you cannot claim a deduction for include:

the full amount of your mortgage payment — only the interest element of your mortgage payment can be offset against your income"

Buy to let mortgages, by definition, are interest only. 

That link says "Do I need to fill in a Self Assessment tax return? ... your income from renting out property was more than £2,500 (you’ll need to contact HMRC if it was between £1,000 and £2,500)"

Income must be after the mortgage payments then ?

you can deduct all valid expenses for repairs maintenance etc but I think they recently changed the law on mortage interest reclaimability. In the income box put the total rent received then there should be another box for the total expenses that you are claiming.

Question Author

Tora, expenses aren't worth noting unless they're more than the £1000 allowance, can't include mortgage payments in expenses ... same question, how I can be taxed on money I only see briefly before the mortgage payment is made ?

If someone is paying you rent for a property, that is income. If it's more than £2,500 a year, HMRC needs to be notified for tax purposes.


You could spend that money on anything you wanted or you could save it.

The fact you have a mortgage and have chosen to spend the income on that is neither here nor there. It is a source of income and you receive the full amount, untaxed.


"same question, how I can be taxed on money I only see briefly before the mortgage payment is made ?" - well because, sadly mortgage payments are not consdiered a legitimate expense any more so as far as the revenue are concerned the rent you get is income (less allowable expenses). One of many reasons why many landlords ar selling up.

Question Author

Oh if only I could sell Tora, if only :( I'd be months without rent, would have to cover the mortgage myself - I can't, the rent pays it. Barely now, with payments soaring.

I don't work, am not pensionable age, not on any benefits, not had a penny in handouts (other than the £400 absolutely everyone got last year), & now it's going to cost me to keep the house going. As soon as there's another maintenance issue it'll be loss making. And I have to lose more by paying tax on money I never see ? It's ridiculous !

I lived there for 16 yrs & had to move for work. Watched it being built  so when the time came, I couldn't bear to lose it altogether hence I got a Buy to Let mortgage. "Would be my pension", I thought. Ne it's just a millstone around my neck :((

You can put it up for sale now as long as you offer vacant possession at completion. Once you have a completion date give the tennant notice.

How do you "learn" how to become a new private landlord? i.e. what you can do and what you can't do?  Who advises?

Question Author

Tora, nice idea in theory but isn't practical. Can't give the tenants notice mid contract, plus she's pregnant or has a very young baby so wouldn't want to move I should think. Inviting estate agents round & getting it ready for the market will be nigh, though not, impossible. Then viewings *sigh* 

TheWinner, the letting agent went through the do's & don't's concerning tenants, but as for finances, no idea. That's why I came here.

but who advises if you don''t want the added cost of an agent?

You only pay tax on the profit you make.

Any costs should be deducted from the income before the tax owed is calculated.

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Unbelievably the mortgage doesn't seem to be considered "a cost". Anything else has to exceed £1000 a year & last year it actually didn't for once.

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TheWinner, I don't  know, that's why I came here. I was hoping someone in a similar situation would comment but they haven't. Looks like I'll have to spend more & get some tax advice. Guess that'll be tax deductible next year ! Probably not the way it's looking.

On top of what's going on now, I'll have to pay a huge chunk of CGT when I sell, then a tonne of tax on the capital !! So much for that house being my pension & me not being a burden claiming benefits of any description :((

Question Author

then a tonne of tax on the *interest* on the capital

It was your choice to take a mortgage surely. The house is yours to sell if you want. Why should the taxpayer fund your mortgage on your second home?

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I've explained why I mortgaged the house to keep it, it should have been my pension. I've claimed absolutely nothing in the way of benefits, & would hope not to in future, I've had not 1 penny in any handouts, so I'm costing the tax payer nothing.

If I was being taxed on "profit", fair enough, but I'm being taxed on money I never see. 

I've also explained why I can't just "sell it", even without the current climate other people's lives would be affected. And I'd have to keep paying the mortgage for months while it was being sold - with what ? Even when I do, there'll be another huge tax bill, CGT.

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