I live in a tied cottage provided by my employer and I own a flat which is my principal property.(UK,Scotland)
Monday, March 29th, 2010 at
4:26 am
I’ve been approached by a trades person who did some work on the flat for me, asking if he could rent the property. As the property is my principal property (and the only one I own) would I be liable for income tax and are there any other changes I need to make like insurance, mortgage etc And is it really all worth it, as the maximum rental income I could make would only just cover mortgage, but as I live rent in my work’s accommodation anything towards paying the mortgage would be great. Any help or suggestions would be great. Rupert Scotland.
Repossession
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Tagged with: Accommodation • Principal • Uk Scotland
Filed under: flat rent
Any income you make on rental should be decalred to the revenue for tax purposes. you also need to tell your mortage provider you are doing this, usually they agree, but may insit of insurance cover to cover the risk.
Maybe the “Rent a Room” scheme could be applied ?
your principal property is the one you live in. you would be liable to pay income tax (altho you get allowances), your mortgage company should be told and you may even be liable for capital gains tax when you sell it. there are also legal requirements you need to meet when you let a property (health and safety stuff such as fire alarms etc), council needs to know for council tax etc, and also insurance people need to know. you could always do it cash in hand but that could go wrong. it would be a lot of hassle, but if its lying empty you’ll make a couple of grand each year anyway. you could look into a letting company doing all the paperwork obviously they will take a big chunk of cash from it but it removes most of the hassle. there are plenty of websites with advice for landlords from landlords going around such as
you will need to tell your mortgage provider and they will tell you exactly waht is required by law
also changes in insurance will be required
you will pay tax on rented property when you sell it
it was’nt much in our case but we had owned it for 15 -18 years but its best to get proper advice so you know whats required