Coach house rental

[sanderr2]

Hi, my wife and I have bought a house which has a self contained granny annexe. We are planning to let the granny annexe but I'm not clear what proportion of the mortgage interest can be offset against the rental income. Is it a proportionate amount of the total mortgage on the overall property? (and if so, who decides what proportion of the total property the granny flat represents?). Any advice gratefully received.

Thanks in anticipation,
Rob

[mullet]

Yes, it will be a proportion of the total interest. If all of the rooms are a fairly similar size (not common) then do a simple apportionment based on number of rooms. If you want a bit more accuracy (and peace of mind) then base the apportionment on floor area.