# Landlord and Tax liability



## mba (Jun 17, 2006)

Hi guys

Hope you can help because i am getting a headache over this and probably over thinking it.

I have a rental property and for the purposes of this we are just talking about rental income & mortgage interest and i will round off the numbers to make it easier.

Rent = £400 pcm
Mortgage = £300 pcm (£250 is interest and £50 capital)

How much tax relief on income can i expect? How much tax am i liable for? Workings would be appreciated 

As i have been working it out i am £100 per month clear = 1200 per year, 20% of that = *£240*


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## bigslippy (Sep 19, 2010)

annual rental income £4800
annual interest £3000


Taxable income £1800

:thumb:


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## mba (Jun 17, 2006)

Somebody told me that i am only liable for the income on my self assessment and not unitil i come to sell do i pay tax on the capital

Giving me a tax liability of £100 * 12 = £1200


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## bigslippy (Sep 19, 2010)

You get tax relief on the interest element of your mortgage plus any insurances etc you pay ie buildings and contents.

I have 3 sources of income and call HMRC when I'm doing my return online , I have found them very helpful:thumb:


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## mba (Jun 17, 2006)

Thanks, i have rang the HMRC and with it being Jan they are rushed off their feet.


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