Renting income considerations

Question from Yash updated on 27th April 2017:

I am about to transfer my property to a company and rent a property somewhere else. The rental income is slightly more than the interest charged on the mortgage. Will the difference be taxed as separate income and will I be able to claim anything on the house I am going to rent in?

Our expert Nick Ashford responded:

The company can claim the interest on money it has borrowed to buy the house from you along with other holding costs including rates, insurance, maintenance, property management etc. If the total costs are less than the rental income the profit is taxable. None of the costs of renting elsewhere can be deducted from the rent the company generates as these are private and domestic expenditure of yours.

Nick Ashford and the team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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