Property rental questions
Discussion
Right, sensible head on. I have just rented out a flat, to brilliant tenants who are even inviting me over for dinner and drinks, for a fair price. So far so very good.
However I'm not sure what to do next. What tax forms do I need to fill out? Can I claim back my mortgage interest? Can I claim back any expenses related to the property? Do I have any statutory obligations?
Any advice whatsoever gratefully received,
Fuff (an absolute duffer when it comes to monetary matters)
However I'm not sure what to do next. What tax forms do I need to fill out? Can I claim back my mortgage interest? Can I claim back any expenses related to the property? Do I have any statutory obligations?
Any advice whatsoever gratefully received,
Fuff (an absolute duffer when it comes to monetary matters)
kerfuffle said:
Right, sensible head on. I have just rented out a flat, to brilliant tenants who are even inviting me over for dinner and drinks, for a fair price. So far so very good.
However I'm not sure what to do next. What tax forms do I need to fill out? Can I claim back my mortgage interest? Can I claim back any expenses related to the property? Do I have any statutory obligations?
Any advice whatsoever gratefully received,
Fuff (an absolute duffer when it comes to monetary matters)
You will indeed have to do a tax return, for the year ended 5 April 2006.
You will be able to claim the mortgage interest as well as repair costs and so forth.
If you supply the property furnished you can claim 10% (of the rent) wear and tear allowance
You must do an annual Landlords Gas Safety Check and get the certificate. Lots of bad non-lavender-scented things can happen if you don't
You don't need to make any declarations on tax until your next Self Assessment tax return. If you don't yet do Self Assessment then you'll need to ask your local tax office to note that you need one and they'll send it out at the appropriate time. This is where you declare the income from renting out and also make deductions for the interest part of your mortgage (not the capital) and any deductions / expenses.
Edit: I must learn to type faster.
>> Edited by JonRB on Tuesday 10th January 14:19
You don't need to make any declarations on tax until your next Self Assessment tax return. If you don't yet do Self Assessment then you'll need to ask your local tax office to note that you need one and they'll send it out at the appropriate time. This is where you declare the income from renting out and also make deductions for the interest part of your mortgage (not the capital) and any deductions / expenses.
Edit: I must learn to type faster.
>> Edited by JonRB on Tuesday 10th January 14:19
kerfuffle said:
Right, sensible head on. I have just rented out a flat, to brilliant tenants who are even inviting me over for dinner and drinks, for a fair price. So far so very good.
However I'm not sure what to do next. What tax forms do I need to fill out? Can I claim back my mortgage interest? Can I claim back any expenses related to the property? Do I have any statutory obligations?
Any advice whatsoever gratefully received,
Fuff (an absolute duffer when it comes to monetary matters)
You will need to complete a self assessment return at the end of the tax year showing any rental income.
You can offset the mortgage interest against any of this rental income.
Statatory rights include a Gas Safety Certificate every 12 months. If furnished, goods should comply with fire resistant standards.
I also ensure a 'duty of care' towards my tenants by providing a smoke alarm, having an electrical test done, etc (would stand me in good stead if one of the tenants was to injure themselves)
If you don`t have a Buy to Let mortgage, you should advise your lender.
It sounds as though you have rented your property out direct to the tenants. Good advise for the future is to reference your tenants as part of a Rent Guarantee Scheme. Its invaluable, as i`ve found over the years. People do lose jobs and circumstances can change; not good if you`re having to stump up mortgage repayments every month.
Try also logging on to the websites of the well known national estate/lettings agents - you should be able to find lots more info there.
Regards
Justin
Saied said:All good advice.
You will need to complete a self assessment return at the end of the tax year showing any rental income.
You can offset the mortgage interest against any of this rental income.
Statatory rights include a Gas Safety Certificate every 12 months. If furnished, goods should comply with fire resistant standards.
I also ensure a 'duty of care' towards my tenants by providing a smoke alarm, having an electrical test done, etc (would stand me in good stead if one of the tenants was to injure themselves)
If you don`t have a Buy to Let mortgage, you should advise your lender.
It sounds as though you have rented your property out direct to the tenants. Good advise for the future is to reference your tenants as part of a Rent Guarantee Scheme. Its invaluable, as i`ve found over the years. People do lose jobs and circumstances can change; not good if you`re having to stump up mortgage repayments every month.
I'd add that an Assured Shorthold Tenancy agreement might be a good idea too, just so that both sides have in writing what is and isn't acceptable / included / covered by the tenancy, and also so that the landlord can get his property back if it all goes wrong, although this is less on an issue these days now the law has been changed.
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