Renting 1st home & tax ..

[ToriesKillingNHS]

Following another thread I’m trying to figure our how to afford <university fees and> semi retirement, as are older parents. And thinking about the following scenario…

If I rent my own house out for (say) £2k a month and I rent somewhere to live thats much smaller that’s say £1k a month, in order to free up some cash for a few years…

I take it that I would be liable for all the profit from renting my house out, I wouldn’t be able to deduct the £1k rent I’m paying to someone else to live in?

Also - what level of salary / income means your student offspring receive less student loan?

Clutching at straws very probably but trying to look at any and all the options…

Yes, you are liable for the 2k less specific allowable expenses

If you net £1500 after tax on the £2000 income, then pay £1000 for somewhere else to live, while still being liable for running costs for the first property and risk of non payment of rent, it might be worth considering staying put and having a lodger instead. With the rent a room scheme, people can earn £7,500 from a lodger tax free. You can charge more, but above that is taxed.
Please also check out Martin Lewis's advice on helping student children financially - he explains how it is sensible to let students take their loans. Top up by all means, but not to panic about student debt - repayments later are income related, many pay nothing.

Renting a home has lots of other costs such as insurance, letting agent fees, if the home is empty you pay up to 100% of council tax, initial checks on prospective tenants e,g credit etc are expensive but insurance can be invalid if you don't do the checks. Be prepared to not make much money to begin with

Also consider that when you then sell your property, you would be liable for capital gains tax for the period it is rented out

Thanks PPs lots of things I hadn’t thought about.

The search for a sound financial plan continues…

I've thought about this - not sure it works with planned age changes but, could you stuff your pension for a few years and would you be able to make a cash lump-sum withdrawal at the point or thereabouts that DC go to uni?

I'm going to be late 50's when DC is 18, not sure what the age limit will be for pension withdrawal and also not clear on the rules as I think then I can't make any more contributions but I'm just thinking at that point I could put money into a stocks and shares isa for the last 10 years.