renting out a house

[gaz1]

I have decided to rent out my house to my daughter, i have to make out a tenancy agreement so i can continue with the buildings insurance, do i need to make one up or is there a standard one i can get and just tweek it for my needs,

also would the rent that she pays (albeit heavily discounted) become liable to me paying tax on it.

i know a few people here rent out there propertys any advice welcome, as its all new to me:rolleyes:

[Getrag]

http://www.lawdepot.co.uk/contracts/tenancy-agreement/?a=t&pid=googleppc-reslse_gb-tenancy_c&s_kwcid=tenancy%20agreement|4001739383

[Geo]

Ha,

 

Iv got a meeting at 4pm the sarvo to do the same thing, looking at renting flat out, so i can go ahead and get another mortage for a house. So looking for all the Info before i decide to go ahead with it

[Abz]

I believe you only pay taxes on it if you are making profit, i.e are not paying a mortage on it.

 

I stand to be correct though.

[Al Massey]

If you are not making a profit on a secind house then you wont pay capital gains tax so it will be fine,

 

Do you have a mortgage on the house?

 

If so you may need to change the mortgage to a buy to rent one,

 

Been a while since i did all this myself so im not 100% sure

[supspower]

You usually pay tax on any profit you make, so rental income less mortgage interest and any expenses wholly and exclusively to the property.

 

Would need to tell the revenue that your renting it so if you dont get a tax return at the mo you will do now.

[ilicos]

If you are not making a profit on a secind house then you wont pay capital gains tax so it will be fine,

 

Do you have a mortgage on the house?

 

If so you may need to change the mortgage to a buy to rent one,

 

Been a while since i did all this myself so im not 100% sure

 

Capital Gains and income tax are two totally different things. You would have to declare the income on your tax return and if there was a net profit you would be taxed accordingly.

 

As far as renting it to your daughter is concerned this is fine. However, renting it to her at a drastically reduced rent could affect you if there is ever an investigation (highly unlikely) and in theory, market value assessment may come into play. i.e. they will look at market value for the time that you were renting to her and top up the rent to that and work out if any tax would then have fallen due.

 

If you are renting it out furnished you also get a 10% wear and tear allowance on gross rent less council tax (if paid by the land lord), or gross rent alone if you do not pay the c.tax.

 

If you want a standard excel based letting accounts format I can email you one.

 

Capital Gains tax will only become payable if and when you come to sell the property. BTW, have you ever lived in the said property?

[gaz1]

Capital Gains and income tax are two totally different things. You would have to declare the income on your tax return and if there was a net profit you would be taxed accordingly.

 

As far as renting it to your daughter is concerned this is fine. However, renting it to her at a drastically reduced rent could affect you if there is ever an investigation (highly unlikely) and in theory, market value assessment may come into play. i.e. they will look at market value for the time that you were renting to her and top up the rent to that and work out if any tax would then have fallen due.

 

If you are renting it out furnished you also get a 10% wear and tear allowance on gross rent less council tax (if paid by the land lord), or gross rent alone if you do not pay the c.tax.

 

If you want a standard excel based letting accounts format I can email you one.

 

Capital Gains tax will only become payable if and when you come to sell the property. BTW, have you ever lived in the said property?

 

thanks for that mate:D

[ozz]

Your main income (salary) has to be declared as well so if you are in the higher tax band then you'll pay the higher rate of tax on your rental profit.

[gaz1]

Your main income (salary) has to be declared as well so if you are in the higher tax band then you'll pay the higher rate of tax on your rental profit.

 

i still have a small mortgage on the property, so if i charge her the the same as my repayments, i should be ok?

[ozz]

I can't remember the ruling, you may only be able to claim the interest on the mortgage. I'll check with the missus, she does the tax returns as I can never figure it out!

 

Just checked (with the missus) and sorry mate, you can't claim for the mortgage just the interest on the mortgage.

 

Disclaimer - we're not tax experts, we have a rental but doesn't mean we are 100% right!

[bignum]

Link for future reference

http://www.yourplacemarketing.co.uk/downloads/edenjoshAST.zip