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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13885
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a home owner in UK since more than 2 years. I have a

Customer Question

I am a home owner in UK since more than 2 years. I have a mortgage and I had to move out from the house 18 month ago . I have rent out the house under consent to lease from the bank. A month ago my fixed mortgage came to an end and I have to pay higher interest from now on. I am thinking about remortgaging the property . This time would have to be buy to let type one. Is that going to affect my taxes. Will I be paying more tax for an income from buy to let comparing to my tax paid now from residential letting under consent to lease ?
Submitted: 10 months ago.
Category: Tax
Expert:  Sam replied 10 months ago.

Hi

Yes it will make a difference as you will find a buy to let mortgage would be interest only - whereas the consent to lease repayments were a mix of capital and interest, and as you can only claim the interest element as an expense against rental income (rather than the whole repayment) then you will claim a larger amount against the rental income, thereby reducing the net income on which tax is due on.

So you will pay less tax

Thanks

Sam

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