What you're saying is that I am taxed on the final sum rather than the rental income. My saving is actually the tax on the ( rental income - £4615 ). Have I got it now?
- posted
20 years ago
OK, I think I've figured it out
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- posted
20 years ago
Almost. You're taxed on (rental income - rental expenses - £4615 + other income). Part of, not all of, the loan interest is a "rental expense".
There is an added complication if you live abroad, because then your agent (in extremis the tenant) must by law withhold, and remit to IR, tax on the gross rental income, and you have to ask IR for (some or all of) it back to help pay your expenses.