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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 ?
No best answer has yet been selected by JustABobIsMe. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.Ahh, or do I take the mortgage payments off the Total UK property income figure ?
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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 ?
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.
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 :((
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.
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 :((
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.