BTL profit

[tim123]

My advice is to sell up soon, forget the profit, you'll be taking an expensive haircut on the capital values soon.

There are people who've been saying that for the last five years.

As the joke goes, "they've predicted 17 of the last 5 recessions".

I happen to think that you are right, but I thought that last year, and the one before.

tim

[dude69]

Help and advice from fellow Landlords on this scenario or how you do it would be greatly appreciated.

My advice is to sell up soon, forget the profit, you'll be taking an expensive haircut on the capital values soon.

[tim123]

You can offset the interest paid against income tax on the initial loan only. It should be fairly easy to "absorb" the additional £102 into allowable expenses. You are automatically entitled to 10% wear and tear. .

Only if you let furnished, and that's instead of being allowed to claim refurb costs "as incurred", so it isn't such a great deal.

tim

[THEPUMA]

there is quite a lot of useful info here:-

http://www.hmrc.gov.uk/manuals/pimmanual/index.htm

[Cooperinliverp00l]

To late house already rented out as un-furnished.

I see what you mean by use the money left over to pay off my mortgage as the more i pay off the BTL let the more profit i would make and more tax i would be charged.

Will check out the revenue site to see if there is a list of allowable expenses to help offset against the tax

Thanks for your advice all

[Ardesco]

Don't pay off the BTL. Use the money to pay off the mortgage on the property you live in instead. The amount paid as interest is not taxible, however the profit you make is.

If you increase the profit by paying off the principal amount on the BTL you pay more tax. If you pay off the mortgage on your main residence instead you reduce the interest payments on your main residence but don't increase profit on BTL hence pay less tax in the long run while saving a similar amount of money.

Also make sure you rent the place out as furnished so that you can take 10% of your income per month tax free for subsistence costs. You only need to provide a bed, a wardrobe, a chest of draws, a dining table + chairs, a sofa and a washing machine to class it as furnished.

[glashIFA@Paramount]

Got my first BTL and money is now starting to come in. Initially i set up the BTL on a interest only payment. i get £500 per month and pay £398 mortgage. The remainder £102 has to be seen as profit. (i think) i know there are certain things that i can then deduct from that £102 e.g cost of any work done on the house, equipment to maintain the house, insurance e.t.c......but what if i then wanted to pay the £102 into the mortgage to reduce it in the eyes of the taxman am i still receiving £102 per month eligable for tax or am i receiving £0 per month cause i putting it back into the property and paying off the mortgage.

Help and advice from fellow Landlords on this scenario or how you do it would be greatly appreciated.

You can offset the interest paid against income tax on the initial loan only. It should be fairly easy to "absorb" the additional £102 into allowable expenses. You are automatically entitled to 10% wear and tear. Then you've got the cost of buildings insurance, agency fees, mileage, any general repairs etc.

Look at the "Land and Property" supplement that you have to submit to the Revenue for guidance.

[Cooperinliverp00l]

Got my first BTL and money is now starting to come in. Initially i set up the BTL on a interest only payment. i get £500 per month and pay £398 mortgage. The remainder £102 has to be seen as profit. (i think) i know there are certain things that i can then deduct from that £102 e.g cost of any work done on the house, equipment to maintain the house, insurance e.t.c......but what if i then wanted to pay the £102 into the mortgage to reduce it in the eyes of the taxman am i still receiving £102 per month eligable for tax or am i receiving £0 per month cause i putting it back into the property and paying off the mortgage.

Help and advice from fellow Landlords on this scenario or how you do it would be greatly appreciated.