Taxable Rental Income allowable mortgage payments

dannycashel

Might have to rent out an apartment i bought a few years ago but need to move to another area for family reasons. Selling is not an option so...........renting seems only solution

I'm trying to run the number now: Rental Income vs. Outgoings along with the tax liability

I'm a bit confused by the 75% allowance against mortgage interest. Is this my monthly mortgage or just the proportion that is paying of the interest so in the early years it probably makes up 80/90% of my monthly payment

and following on from this would i be right in thinking that as the years roll on the interest proportion of my repayments fall to very low levels as most of the mortgage is directed towards the principal. Therefore the tax liablity on the income increases

Therefore as a long term strategy you could expect higher and higher tax liabilites on the income associated with renting out your property

Pawwed Rig

dannycashel wrote: »

I'm a bit confused by the 75% allowance against mortgage interest. Is this my monthly mortgage or just the proportion that is paying of the interest so in the early years it probably makes up 80/90% of my monthly payment

It is 75% of the annual mortgage interest paid. (reduced from 100% a couple of years ago).

There are lots of other deductions against rental income such as house insurance, PRTB fees, nppr fees, capital allowances etc etc

dannycashel wrote: »

and following on from this would i be right in thinking that as the years roll on the interest proportion of my repayments fall to very low levels as most of the mortgage is directed towards the principal. Therefore the tax liablity on the income increases

Well yes but it's a slow process!! You can offset so much that the liabiilty isn't as linear as you seem to expect. For example once off expenses and maintenance

It will depend on how long you have owned it and your status to determine whether there would be a stamp duty claw back (probably not in your case)

kennyb3

I think NPPR fees are non tax deductible, unless there has been a recent change?. See here

Pawwed Rig

kennyb3 wrote: »

I think NPPR fees are non tax deductible, unless there has been a recent change?. See here

Thanks I stand corrected.

ceilishark

dannycashel wrote: »

Might have to rent out an apartment i bought a few years ago but need to move to another area for family reasons. Selling is not an option so...........renting seems only solution

I'm trying to run the number now: Rental Income vs. Outgoings along with the tax liability

I'm a bit confused by the 75% allowance against mortgage interest. Is this my monthly mortgage or just the proportion that is paying of the interest so in the early years it probably makes up 80/90% of my monthly payment

and following on from this would i be right in thinking that as the years roll on the interest proportion of my repayments fall to very low levels as most of the mortgage is directed towards the principal. Therefore the tax liablity on the income increases

Therefore as a long term strategy you could expect higher and higher tax liabilites on the income associated with renting out your property

I am in a similar situation and the thought of doing all this tax declaration scares the life out of me!

Could anyone that has been in a smiliar situation recommend an accountant that looks after this specific situation at a reasonable price?

Clanket

ceilishark wrote: »

I am in a similar situation and the thought of doing all this tax declaration scares the life out of me!

Could anyone that has been in a smiliar situation recommend an accountant that looks after this specific situation at a reasonable price?

Hi, send me a private mail if you need help.

The deadline is fast approaching.