please help someone.

raffer123

i think i may have got myself in to a bit of a mess here.
we are a married couple with 1 child and another on the way.we live in a 2 bedroom duplex which we own.we are in negative equity,we both are in full time employment.our house will not be big eneough when the new born arrives so we are leasing it out to the council on a 5 year lese at eur500pm,we are about to start renting a 4 bedroom house at eur750pm.
our mortgage is eur820pm.
as thing stand with this new set up so far we would be down eur250pm.
i have just found out that i am liable to pay incom tax on the rent i recieve...i.e 41% of eur500 after,,but i am not intitled to tax relief on the eur750 i am paying on the house i am renting.
as it stands i would recieve only eur320 after tax on the eur500 (motgage interest is deducted and the maintenance fee is deducted) .
i have been given 3 different answers from the authorities.
also 2 friends of ours have also made the same choice and are not paying tax on thier rental income.are they going to get a major tax bill? i have to make up my mind by next wednesday.thanks for reading.

ants09

hi first of all

rental income 500pm x 12 = 6000 less relevant expenses etc insurance, maintenance and 75% interest relief on your mortage

second main employment you be entitle to usual allowances plus rent tax credit of 640 pa or 1280 if over 55 hope this clarifys the suitation

raffer123

thanks ants.ive also just been told i will lose my TRS.Is this correct?
this is getting worse by the minute.

ants09

raffer123 wrote: »

thanks ants.ive also just been told i will lose my TRS.Is this correct?
this is getting worse by the minute.

if you rent out your house you will not be entitle ot trs but you will be entitle to interest relief against your rental income.

you cant claim trs and interest relief against your rental income as you be cliaming the same thing twice !!!!!!!!!

ps if you rent from the council you wont be entitle to claim for the rent tax credit.

raffer123

im not renting from the council.i am renting mine to the council and renting a private house.
can i run this past you as i understand it.
rental income 6000pa
minus 860pa maintanance fee
minus mortgage interest 900pa aprox
leaves me paying 41% on 4240.
but then i get 640 tax credit for the property i am going to rent.
thanks again ants.

Mr. Incognito

Specific tax advice is banned under the charter- read it.

Take it to pm if you want but this thread is closed.