Renting out a second property - financial/tax considerations?

[venetianred]

In short, we are thinking of renting out our second property. We are just weighing up the pros and cons and potential financial benefit (or not).

In particular, we are trying to find out more about tax considerations, and any exposure we could have to capital gains tax.

Can anyone tell me more, or forward me to a good website which explains this well.

Many thanks for any help.

You will need to pay income tax by returning an annual tax return on the rental income. You can take away various costs such as the interest part of the mortgage payment, the cost of advertising or the agency fees, redecoration costs, etc. You can also decide between putting the costs of items you replace or a wear and tear allowance of 10% of the annual rent.

CGT will apply if you sell it but how much will depend on whether you ever lived in the property. There are various things you can out against the tx bill such as lettings relief and your CGT allowance.

this link exzplains it well

I have been renting out a second property for 7 years so happy to answer any questions.

Excuse the typos!