If you have bought a house an now find that you have to move to Plymouth for your Training number can you rent my house out?
YEs of course you can.. However the Government has brought in legislation to discourage such people from holding on to houses.. What does it mean
Let us say you have a house for £200000 and a £150000 mortgage.
a) Additional Stamp duty If you buy a house in Plymouth, and you have a house in Manchester, you will have t pay additional 3% stamp duty land tax if you purchase another house
b) Renting figures – You want your expenses to match your rental income let us take a look.
The calculations are tricky. You must rely on a professional accountant to verify this
Income
Rent £900 per month *12 =10,800
- This rent has to be divided according to the title deeds.
- So if the house is split 50/50 then rent is 50/50
- If house in only in your name then 100% of income is in your name
- You will have to fill in Self assessment every year and pay your accountant
Please do not think the HMRC will never find out. They keep track of you..( your address vs home registry land ownership details) When you get a letter through the door and you are prosecuted, you will have to report yourself to the GMC as a probity issue. Do you want to risk you job and your career?
Expenses
- Insurance £250
- Boiler service £300
- Other legal requirements £250
- Repairs/ service £1000
- Estate agent £1500
Total £3300
Taxable income £7500
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EXTRA Tax payable 7500*40% = £3000
( There may be a 20% rebate)
Balance in hand £4500
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Mortgage to be paid £400 per month *12
£4800
(Mortgage can no longer be claimed as an expense)
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Total loss per year (£300)