Hi everyone,
this is the situation, my current house(which is mortgage free) is going to be rented out and we have just bought another house with mortgage that we are going to live in.
We have been told that because the rental house is mortgage free ill have to pay tax on the full anount £525, rather than just profit if i had a mortgage i.e rental £525 mortgage £300 = £225 profit(taxable). Is this the case and if so how can we get round it, reduce the tax bill.
One idea is if I take another mortgage out on the rental one and use the money to do up our new house, is this a possiability??
Hope it make sense, its starting to boil my brain trying to work it all out??!!??
Thanks in advance
Paul
this is the situation, my current house(which is mortgage free) is going to be rented out and we have just bought another house with mortgage that we are going to live in.
We have been told that because the rental house is mortgage free ill have to pay tax on the full anount £525, rather than just profit if i had a mortgage i.e rental £525 mortgage £300 = £225 profit(taxable). Is this the case and if so how can we get round it, reduce the tax bill.
One idea is if I take another mortgage out on the rental one and use the money to do up our new house, is this a possiability??
Hope it make sense, its starting to boil my brain trying to work it all out??!!??
Thanks in advance
Paul