Renting and tax

[getpooh]

I have been renting my house for several months. I have declared it with the council re community charge. I am using an agency. I have informed all the utilities. I have informed the morgage company who have put the rate up. I have changed the buildings insurance to include rental and upgraded assurance. I have just been told I could be taxed at 40% of the whole income. If this is true I will sell up. I was led to believe it was after expences i.e. mortgage, insurance, assurance and maintance. Do I need to tell the IRS or will the agancy do it for me?

[Ethel]

Nearly right - you will pay tax after allowable expenses - this includes INTEREST on mortgage repayments. So if you have an interest only mortgage, you can offset that against your income.

http://www.direct.gov.uk/en/MoneyTaxAndBenefit s/Taxes/TaxOnPropertyAndRentalIncome/DG_100140 27