question about paying tax on rent received if I rent my house out

[BeattieBow]

Sorry not the most interesting of questions, but I wondered if I rent my house out what I can set off against the rent received when paying tax (if anything).

If I rent it out can I set the mortgage payment off against the rent?

if so, can I only set off the interest, or can I set off the whatever I choose to pay off the mortgage? So if the interest on the mortgage is say, £500, but I choose to pay £2000 off because I receive that in rent, what amount would I pay tax on - is it the £2000 rent received, £1500 because I can deduct £500 interest payment or zero because I can deduct the whole amount paid to the mortgage?

Thanks if you know the answer!

It's the interest part only, plus things like the insurance, maintenance on boiler contracts if you have one and things like that.

The Direct Gov website has some good information on Expenses and Allowances on Income from Property The answer to your question appears to be that you can deduct any interest payments but not money that you pay to reduce the capital of the loan.

I think you can also offset smaller things, like the petrol money to go and check on the property, any maintenance costs etc. Might be worth you speaking to a tax specialist - they would probably chat to you for a while for free if you said you were considering becoming a client. I would wait a few months though - they are not happy people in January!

There are really good advice notes that go with the land and property pages for your tax return. Rough guide is you can either go for replacement when you have to do it or do a 10% of income through out the time of rental, but not be able to submit individual receipts. We choose to go for the 10% when we ran just one property as it was more straightforward. Yes it is just the interest portion of the mortgage that you get tax relief on. When it was just one property I found the tax return very straightforward and did it myself.
I have to say now we have more properties of several different types I do the profit and loss accounts and then pay the accountant to do the return.

Agree with Lizcat - although not to the point I have actually got off my arse to do the imminent tax return in question . I just go for 10% as it's much less hassle than figuring out exact costs, the return is easy enough to fill in.

thanks everyone. Will look further into this and the direct Gov pages linked.