I’d like to let out my home in London for moving out to the country where I’d like to rent a bigger house.

Will I have to pay tax on the rental income without claiming the cost of the new rent?

  • 1
    Generally speaking, your own living expenses do not count as rental expenses; only costs directly associated with letting a property can be included (and even then, there are limitations, e.g. capital expenditure cannot be claimed; special rates for finance costs, etc). There are a lot of rules and regulations related to letting a property. Jan 4 at 9:00

Here is a page that gives an overview on letting homes in the UK.

Your rental income counts as income and you have to pay taxes on it, and possibly National Insurance. However you can deduct some of the expenses you incur as part of letting the property, and pay tax only on the profit.

Quoting the above:

Allowable expenses are things you need to spend money on in the day-to-day running of the property, like:

  • letting agents’ fees
  • legal fees for lets of a year or less, or for renewing a lease for less than 50 years
  • accountants’ fees
  • buildings and contents insurance
  • maintenance and repairs to the property (but not improvements)
  • utility bills, like gas, water and electricity
  • rent, ground rent, service charges
  • Council Tax
  • services you pay for, like cleaning or gardening
  • other direct costs of letting the property, like phone calls, stationery and advertising

There is also an allowance of a thousand pounds on which you don't have to pay tax.

You cannot deduct the rent you are paying for where you live. You couldn't deduct it if you didn't have the rental property and you can't deduct it when you do.

  • AFAICT, the £1000 allowance only applies if you're not also claiming allowable expenses. If your expenses are greater than £1000, then it's better to claim for them, instead of the allowance. Jan 5 at 12:12

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