Aaron
Member
Registered: 9th Aug 04
Location: Cottingham, East Riding
User status: Offline
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Yo bitches
I want to rent out my two bedroom flat ASAP. Let's say the rent price is £450 PCM....how much tax should I expect to pay on that? I've done some reading on tinternet about this, but tax rules boggle my mind. any help?
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Gary
Premium Member
Registered: 22nd Nov 06
Location: West Yorkshire
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Surely would just be taxed an income, so normal tax rate I would have thought.
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James
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Registered: 1st Jun 02
Location: Surrey
User status: Offline
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quote:
Originally posted by Gary
Surely would just be taxed an income, so normal tax rate I would have thought.
This. But if it takes your annual income over the 40% threshold you will get taxed at 40%
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Aaron
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Registered: 9th Aug 04
Location: Cottingham, East Riding
User status: Offline
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Ah I see, would I be expected to pay the tax monthly or annually? I'll still be 20% tax, which is nice.
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Toby
Premium Member
Registered: 29th Nov 05
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It depends on a lot of things but basically you can offset certain payments out agasi t the money earnt for example if you earnt £6k from rent but actually paid 7k in interest on the mortgage then ypou would actually be entittled to a tax rebate.
You can also declare any work you have had done, maintainence, painting, your accounting fees for your tax return and your letting agent fees etc
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Toby
Premium Member
Registered: 29th Nov 05
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quote:
Originally posted by Aaron
Ah I see, would I be expected to pay the tax monthly or annually? I'll still be 20% tax, which is nice.
Anually in January time when you have sent in tax return
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Gary
Premium Member
Registered: 22nd Nov 06
Location: West Yorkshire
User status: Offline
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Wouldn't you be registered self employed as well?
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Rob_Quads
Member
Registered: 29th Mar 01
Location: southampton
User status: Offline
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quote:
Originally posted by Toby
It depends on a lot of things but basically you can offset certain payments out agasi t the money earnt for example if you earnt £6k from rent but actually paid 7k in interest on the mortgage then ypou would actually be entittled to a tax rebate.
You can also declare any work you have had done, maintainence, painting, your accounting fees for your tax return and your letting agent fees etc
Are you talking about renting out a room or a house. For renting out a room its not the same as a house. You have to be very careful about what to claim.
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Toby
Premium Member
Registered: 29th Nov 05
User status: Offline
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no renting a house as per the OP
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Toby
Premium Member
Registered: 29th Nov 05
User status: Offline
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quote:
Originally posted by Gary
Wouldn't you be registered self employed as well?
not quite but there is a form to fill in to make the IR aware that you are earning another income
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Rob_Quads
Member
Registered: 29th Mar 01
Location: southampton
User status: Offline
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quote:
Originally posted by Toby
no renting a house as per the OP
Ah sorry - read it as rent out some bedrooms. Yup - As Toby says - you can deduct any costs against it i.e. if you need to paint your house..sorry the rental house  you can put the cost of that against any profit you have made and thus would pay tax against.
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Aaron
Member
Registered: 9th Aug 04
Location: Cottingham, East Riding
User status: Offline
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Great, thanks for all the info. Looks like i'll get the ball moving soon 
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spencer88
Member
Registered: 6th Oct 08
Location: cornwall
User status: Offline
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Are you renting it out yourself or letting an agent do it for you?
Because amongst other things you will need a good tenancy agreement and the deposit placed in a Tenancy Deposit Scheme.
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Fad
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Registered: 1st Feb 01
Location: Dartford Kent Drives: 330cd
User status: Offline
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http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435
Read this as it seems everyone is clutching at straws here.
When I was in accounts we would do individual returns for landlords as it's taxable under a different schedule. This way you can deduct allowable expenses such as mortgage interest, furniture allowances, letting fees etc making the tax burden less.
I do know a couple of people who do nothing but collect rent and don't declare anything but IMO it's not worth the risk. Also setting up your own tenancy agreement is a piece of piss and all you need is to hold a deposit in specific account and just carry out your landlord duties doing inspections from time to tim.
[Edited on 06-10-2011 by Fad]
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