75% relief on mortgage interest

terencemc

Is this still available?
I have heard conflicting reports.

If the property which I lived in earned say 20k a year by renting out rooms with annual interest of say 10k. I assume the following would apply:

Total income from property: 20k
75% relief on interest: -7.5k
Rent a room relief: -10k
Net taxable income for property =2.5k


Am I correct in thinking this?

Cheers

D3PO

terencemc wrote: »

Is this still available?
I have heard conflicting reports.

If the property which I lived in earned say 20k a year by renting out rooms with annual interest of say 10k. I assume the following would apply:

Total income from property: 20k
75% relief on interest: -7.5k
Rent a room relief: -10k
Net taxable income for property =2.5k


Am I correct in thinking this?

Cheers

Totally incorrect !!!

Before I answer properly you need to clarify. Are you living in the house ?

hfallada

You can only use the rent a room scheme if you live in a house. So there fore I imagine you cant claim mortgage interest relief as its your Principle private residence and not a rental property. I imagine mortgage imagine will take a hammering in the next 2 budgets.

terencemc

Yeah as I said in the original text "If the property which I lived in"

D3PO

hfallada wrote: »

You can only use the rent a room scheme if you live in a house. So there fore I imagine you cant claim mortgage interest relief as its your Principle private residence and not a rental property. I imagine mortgage imagine will take a hammering in the next 2 budgets.

This is why I haven't answered the OPs question.

If the OP is living there. He isn't entitled to MIR, nor is he entitled to rent a room relief of 10k as the way rent a room works is that if you go 1 cent over 10K every single penny becomes taxable.

So if the OP is living there all 20k are taxable at his rate of income tax which I suspect would be the higher band.

If the OP isn't living there hes obviously not entitled to rent a room relief as hes not living there and must be to avail of this. He would however be entitled to MIR relief of 75% provided he has registered with the PRTB.

MIR co0uld and will most probably be abolished at some point in the future but OP right now it exists.

Either way they only definitive thing I can say right now is that on the figures quotes the OP is not entitled to Rent a room relief regardless of whats going on

D3PO

terencemc wrote: »

Yeah as I said in the original text "If the property which I lived in"

In all fairness that's a bit ambiguous. Which I lived in is past tense I.e I don't live there anymore.

If you said if the property "which I live in" it would indicate you still live there. Im still not sure from your reply it seems to indicate you still live there. Its only one letter but it makes your post unclear

So to be 110% clear.

Do you live there now ?
If not did you live there at the time you rented out the rooms ?

terencemc

Cheers guys for the help - I understand the context of both MIR and R.A.R.R. now

D3PO

terencemc wrote: »

Cheers guys for the help - I understand the context of both MIR and R.A.R.R. now

NP

your either 12.5k worth of taxable income (renting and not living there minus taxable deductions)

or 20k of taxable income (if you are living there in which case you have no deductions to reduce this taxable amount)

So if you are living there your in a far worse position form a tax liability standpoint.