Rent apt or keep trying to sell

[Thrifty1]

Thats great Watersprite thanks, panic over.

 

[NicolaM]

Thanks Sprite

Nicola

 

[WaterSprite]

No worries at all - just fyi and for completeness, here's the question I mailed them:

"Hello,

I called with this query this morning and was asked to email it in. I'm thinking of moving and renting out my current property (currently my PPR but it would no longer be after I move out). My question is whether I can offset my rental income that I get for this property against the mortgage interest I pay in respect of my outstanding mortgage. I'm not referring to TRS.

At this link: [broken link removed] it says:
"Allowable Deductions

A person may claim a deduction from gross rent for legitimate property related expenses as follows:...

Interest - Relief is due for interest paid on loans to purchase, improve or repair a residential premises (some exceptions)..."


My question is what are the "exceptions" referred to above? Under the Finance Act 1998 (per IT70) it appears that one could not offset mortgage interest against rental income if a property was once your PPR but I believe that these rules have changed. I cannot find any newer information on the topic other than the Rental Income Guide I refer to above, which does not clarify the question....."

 

[ClubMan]

Alrightly then - Revenue got back to me. With allowances for the usual caveats that others have mentioned (not relying on Revenue and all that). Here's what they said:

Dear [Watersprite],

I refer to your query below. The Mortgage Interest paid can be offset against the rental income received. Exeptions would be interest paid on loans acquired for the purchase of fixtures & fittings.


Yours Sincerely
North City PAYE

As I said above. And bear in mind when converting a PPR to an investment property only interest on the amount originally used it purchase or renovate the property outstanding at that point can be set against rental income. Lots of people think that you can raise a load more cash from the rental property and then write off the interest. This is NOT the case.

 

[Thrifty1]

Do you mean Clubman if we remortgaged to raise more cash ?
All original mortgage was used to purchase property and no additional monies raised.

 

[ClubMan]

Do you mean Clubman if we remortgaged to raise more cash ?

Yes - unless the extra money raised was used to purchase or renovate the investment property.