baza31
Member
Registered: 19th Apr 03
Location: yorkshire
User status: Offline
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As above , just had an offer accepted on another house today . What's crack with unearned income? Is there anyway of avoiding the tax without putting repairs etc against tax end of year? I.e if I started a company could I put all rent to buying another and pay as little tax as possible ? Ta
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Rob_Quads
Member
Registered: 29th Mar 01
Location: southampton
User status: Offline
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No easy way to avoid paying tax on profits made from a 2nd house.
Only way is to keep shut about them and don't self certify and hope the tax man does not start asking questions about the extra income.
My wife rented her house out and did not bother letting the tax office know (made no difference in the end as it lost £30 over the year so would have made sod all difference really)
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baza31
Member
Registered: 19th Apr 03
Location: yorkshire
User status: Offline
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What do you mean lost £30? They take it before mortgage don't they? Ie if I got 500 a month and mortgage was 510 I would still have to pay tax on the 500? I'll just pay if no way around cant be arsed owing a load back to them
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Rob_Quads
Member
Registered: 29th Mar 01
Location: southampton
User status: Offline
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Your not taxed on the £500
As from direct.gov.uk
Letting residential investment property is treated as running a business - even if you only let out one property. And if you let out more than one property in the UK, they'll all be treated as a single business.
Whether you let one or several properties, you're taxed on the overall 'net profit'
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luciaadr
Member
Registered: 11th Aug 04
Location: Bexleyheath, Greater London
User status: Offline
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You can deduct the mortgage interest, not the capital element.
So in your example, if you get £510, and pay £500 mortgage, £350 of which is interest that month, you will be taxed on the 160 difference
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Liam-Wilko
Member
Registered: 6th Mar 08
Location: Sunderland, Tyne and Wear
User status: Offline
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had property income
- of over £10,000 before deductions or
- of over £2,500 after deductions
only need to declar any home income (rent income over these thresh holds) anything above this will make you fall in a self assesment and will need to pay tax but you can fall in your faver if you have a loss
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