UK Rental income and tax advice

[Poozay]

Hey guys, some advice please.

Need to rent out our flat in London and move in with family to look after mother, also doubles up as helping to save more money etc. We will only own this 1 property, it is also a shared ownership scheme, where we own a percentage of it. We are planning on 'stair casing' to 100% ownership with our current mortgage provider and then getting 'consent to let' for a few years.

 Ideally we would like to use the rental income to pay off mortgage, and whilst looking after mother save money to buy a house to live in, keeping the flat as a rental income.

Could anyone advise on any problems or implications with this (Tax, income or otherwise) as I know rules have changed for BTL etc. But we will only own this one property, so how does that work? Does it come under your personal tax allowance? And if so, can it be under just one of ours? i.e. the lowest earner...

Also our lender (Nationwide) will keep it as residential mortgage but add 1% interest on top (I think).

How does it work when buying another property (whenever that is, although at least 3 years away)? i.e. stamp duty, tax etc

Any advice from those with experience is much appreciated,

Thanks

Anyone

[UKMustache]

I haven't got time to do a lengthy response but you'll find a lot of guidance on the HMRC site https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

The property income needs to be split on the same basis as the ownership of the property, unless you want to mess about making elections etc.  IE if you own it 50-50 then it gets declared 50-50.

You can only claim the interest element of your mortgage as an expense and even then you should google 'section 24 rental income' to find information on a recent tax change that may render the whole idea unworkable.

Run the numbers in great detail but IMHO it only works if you've got a very small mortgage or don't make much in other income from your day job.

[Playing with Fire UK]

You'll also pay the higher stamp duty rates if you buy a second place and keep the BTL.

[Poozay]

Thanks all