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Sam, Accountant
Category: Tax
Satisfied Customers: 14192
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am looking to move area and want to rent out my house (which

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I am looking to move area and want to rent out my house (which I have a mortgage on) and use this rental income to rent another house. I anticipate I would do this for 2 years. What tax liability would I have in this situation?

Thanks for your question, I am Sam, one of the UK tax experts here on Just Answer.

You would need to advise HMRC that you had begun to receive rental income, which would lead to you having to complete self assessment tax returns each year (after each 5th April) and you would need to declare ALL income, including this rental income.

From the rents received you could claim expenses, such as the interest element of any mortgage/loan repayment, having keys cut, landlord insurance, gas and electric safety checks, any managing agent fees (if you use one) or travel expenses to visit to property to carry out checks and/or repairs, the repairs themselves (as long as you have a tenant in place) advertising, etc

You then would be considered tax on the remaining rental income, along with any other income you have.

Any tas due would be paid the 31st Jan following the tax year end.
So, say you started to rent out from now, the first self assessment tax return would be issued after 05/04/2014, and any tax due would have to be paid to HMRC by 31st Jan 2015.

I am afraid the fact you will be paying out rental income to rent out somewhere to live, will not be considered an expense.

Let me know if you have any follow up questions.


Customer: replied 4 years ago.

Hi Sam


Thanks for your answer. it is very helpful




I basically want to work out how much tax i would pay on my rental income.


What would be my tax implications in the following situation:


My salary: £84k/yr


My monthly mortgage repayment: £3k/month - this is an interest only mortgage


Potential Rental income from my property: £5k/month


Other potential tax deductable expenses (as per your email): £250/month



i hope that makes sense


Thank you





Hi Peter

Thanks for your response
As this is over and above your original question (as you did not indicate that you wished a calculation also to be made) then this should have been listed as a new question, with a new amount offered for the work. However as this is the first time you have used Just Answer I will answer this additional question requesting the calculation on this occasion.

Then a net income of £1750 per month £21,000 x 40% = £8,400

But I should advise that as this scenario will see your total income is excess of £100,000 then you will also start to have your personal allowances reduced £84K plus £21K = £105,000 and as this is £5000 in excess of £100,000 and your personal allowance will be reduced for £1 for every £2 over the £100,000 threshold - then you personal allowances will be reduced by £2500 - which will create a further tax position of £1000

So rental income tax plus reduced allowances - total bill of approx. £9400


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