Land Lord Tax Question

leaskovski

leaskovski

leaskovski

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Not sure if this is ok here, or in the Home & Garden centre, so mods, feel free to move if required.

I know we have a few land lords on these forums, so hopefully you can clear something up for me.

When calculating tax due on rental income, you can offset any out goings with the upkeep of the property, i.e. ground rent, maintenance, agent fees and the like. Can you include mortgage repayments in that? From what I have been reading, I can't seem to find a definitive answer on it.
 
Mortgage payments are split, you can offset the interest component, but not any repayment component.
Agent fees can be offset, and capital expenses can be offset, there is a wear and tear allowance for basic maintenance also afaik, it might be 10% of rental income, not 100% on that.
 
If your mortgage is interest only, you can offset outgoings by the interest amount.
If your mortgage is repayment, you can only offset the interest part, not the repayment part.
 
Thanks people! So how do the HMRC work out what the interest part of a mortgage is, or is that something you have to do and provide them with it?
 
You should be able to ask your lender for a breakdown of what part is repayment and what part is interest only.

Sometimes on end of year statements they show the breakdown of this.

If I recall its often something like 1/3 repayment, 2/3 interest.

Out of interest may I ask who are you borrowing from and at what rate?
 
The lender is Santander. It used to be an interest only mortgage, but we switched it at the end of last year to a repayment. I can't remember what the rate is off the top of my head.
 
Originally the mortgage have never been classed as an official buy to let product. Its just a bog standard mortgage which has a letter of consent from the lender to say they are ok with it being let.
 
leaskovski said:
Originally the mortgage have never been classed as an official buy to let product. Its just a bog standard mortgage which has a letter of consent from the lender to say they are ok with it being let.
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REALLY? I don't suppose if you wouldn't mind dropping me an email in trust with details of this mortgage product? I would be grateful!
 
Cavallino said:
REALLY? I don't suppose if you wouldn't mind dropping me an email in trust with details of this mortgage product? I would be grateful!
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I am sure it was an interest only home loan, that changed when they started renting the house, moved it to a repayment, and rather than fuss over losing a customer, Santander took the view in that instance they would allow the home loan to start rather than change it to BTL as the owner has n other home loan?

I doubt it is an offered product, if it is, then let me know, I'd be very interested.
 
My advice would be to get an account to do your first year, you can then continue to use them or just cut and paste what they did the previous year with this years figures.

I find they more than pay for themselves though as i always seem to end up paying way less than i would expect....

I use taxdog, if you are employed and have a p60 and a single property its £125.. You can do it all in a matter of hours as long as you have all your expenses at hand. You dont need to povide receipts, but you must have them incase you get audited! So dont make stuff up!
 
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