If i rented my home out ,what would the taxman take??

Question

if my mortgage payments where £485 per month .and i rented my house out for £550 .what would the tax man take his sums from ,the £65 profit or the whole monthly payments.

also if i sold my house in years to come would i be taxed again on sale of the whole house ????????

Answer 1

You can only claim tax relief on the interest on mortgage payment, not the capital repayment. That depends on the age of your mortgage, on newer ones the repayments are mostly interest. As the mortgage gets older, the interest reduces, and the capital repayment is more.

It is possible in years to come you may be liable for Capital Gains Tax if the house is not your main residence. It depends on the times involved in living there and renting. You should consult a financial advisor.

Answer 2

You would be taxed on the £65, but only after costs like insurance and heating maintenance and building maintenance etc.

Your primary home can be sold on taxfree. If you own the house but rent it out it still is your primary home if you rent your current house. As soon as you have two homes the other will be liable to capital gains tax, which btw drops after 2 yrs.

PS the rent income is added to your normal income.

Say you earn £1000 on rent and £19000 on job or whatever, your total yearincome is £20000, this is then subject to normal taxrules like  tax free sum  etc.