Thanks reply. Would it have been any different if property was on mortgage and not 'fully owned' in which case mortgage repayment would be made to lender (bank)? I mean would this repayment to lender not be allowed as an 'expense' against rental income?
Thanks Sam, rated you :)
....I have always thought that loan repayments are allowed but now I understand.
As I do have a day job from which PAYE is deducted, should I be worried that earning additional income would tip me over to higher tax (40%) threshold? I earn below 35k at the moment and with additional rental income, total earnings could be within the region of 43k (9k from rent). OR rental income will be treated separately with the basic tax rate of 20% applied? I understand that if property is managed by an agent, they could deduct the tax element at source in which case I may not need to complete a self-assessment, as the agent will be providing me with tax certificate at the end of the tax year? If I was to do self-assessment, should be applying 20% to the net income of 9k instead of 40%?