renting main residence

[mary@mac56987.fsnet.]

From September I am hoping to rent my house out for at least a year to allow me to raise money to travel and then to go traveling from March onwards.Up until March I will be staying with friends who will not charge me rent, I'll only need to contribute for food and bills. Will I be liable for tax on the rental for my house?
Any thoughts will be much appreciated.

[accountant@uktaxshop]

Mary, you will be liable for income tax on your rent.

However you can offset the interest element of any loans you have used to buy the property. There are also other allowable deductions including agent fees, and a 10% wear and tear allowance if you are letting furnished.

You will need to complete a self assessment form next year to declare any income from now until April 2004.

It is also worth bearing in mind while you are abroad, you will still be liable for the income generated in the UK from your property. However as you will receive your full personal allowance to net off against this, you not need to pay anything.

There is actually a formal process to go through to apply to have the rent paid to you net, and not have a slice deducted at source.

If you need some help planning this and filling in your forms, please let me know.


James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436