Renting & Letting at the same time

[BERGS2]

Wondering if i can tap a few of the knowledgable minds here for some tax info...

Mrs & I are currently selling the house with a view to renting for a year or so.

We have now found a place that we'd really like to rent but as such that makes the sale of ours somewhat urgent....

If we were to rent out our gaff instead, would we be able to offset living expenses (i.e. rental on our main property) against the allowable expenses of letting out our house?

had a look here, but not to clear: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Ta...

Assuming the rental on our new place is c. £1700 pcm and the existing place would let for c. £1200, can we fully mitigate rental income for tax purposes?

Any advice gladly recieved!

BERGS

[Coco H]

No. Tax deductible items would be the INTEREST (ie not capital) part of your mortgage and other expenses assocaited with the house being let. In effect you are running a rental business and so the expenses must be incurred wholly and exclusively for the purpose of your rental business - so your new house rent won't count

ETA - good place to start
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2005.h...


and a list
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2050.h...

Edited by Coco H on Monday 30th March 20:39

Edited by Coco H on Monday 30th March 20:40

[BERGS2]

Coco H said:

No. Tax deductible items would be the INTEREST (ie not capital) part of your mortgage and other expenses assocaited with the house being let. In effect you are running a rental business and so the expenses must be incurred wholly and exclusively for the purpose of your rental business - so your new house rent won't count

ETA - good place to start
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2005.h...


and a list
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2050.h...

So of the 1200 mortgage payment, say 600 was interest & other allowable costs, we'd be taxed on £7200 for the year at, what, 40%?