Renting home- PPR and tax related issues?

[Wouldbeguru]

My work colleague recently purchased a house for 160,000- now valued at 200,000. He lived in it for the past 4 months, but has now decided to move in with his girlfriend- and rent the new house.

What are the tax related implications? Also any other comments?

 

[ClubMan]

There are lots of existing threads covering this. In summary:

• Stamp duty clawback.
• CGT on any eventual resale gain if he holds onto it for more than 12 months and continues to rent it out thereafter.
• Inability to continue claiming owner occupier mortgage interest relief on the mortgage.
• May need to inform lender of change of use (check mortgage contract terms & conditions)
• He may be able to cancel the mortgage protection life assurance since it is not necessarily mandatory on investment properties.
• Owner occupier home insurance will not cover a rental property.
• Other issues are covered in the Property Investment FAQ.