Quick tax question btl mortgage

[renault12ts]

The point is people try to time the market. Would you have invested in March when things were going south? Probably not. But now people will pile in as the market has risen and have probably missed the best. Get in and stay in is the best advice.

 

[Smiley]

Trouble is it has become so much more volatile; stocks that would have been considered "as safe as houses" a few years ago - like the big banks - all of a sudden are not. And as for drip feeding money in over several years - well that has not been so good over the last 10 years either.
It would have been good advice tens of years ago to get a with profits endowment - look where that ended up. I think that the std advice of the past has gone out of the window - at least for the next decade or two. Maybe it is time to take a bit more of a punt, a need to time the market and be more aware of what is going on month by month and not just leaving the money invested in the same old UK stocks?

 

[LTD]

I like being poor and sleeping at night.

 

[Swiss Toni]

Further suggestion re the BTL mortgage - overpay it. Some companies allow you to do it, some don't. We are in a similar situation as you - trying to keep proft to a minimum, and preferably only just make a loss. We look at the end of the year, accountant does his bit, gives us the number, we overpay the mortgage co, and boom, no profit.

I *think* you need to speak to your accountant - if by over-paying you are paying back some of the capital loan rather than interest, you could be in trouble - it is only the interest that is tax-deductable, not repayment of the loan itself?

So if you are repaying the loan and reducing the ammount you owe, you are still makig a profit and the taxman will want a slice...

(But if you are paying off interest, I see no issue!).

 

[Stuart K]

Agreed. Profit is not cash flow (M'g payment vs rental income). If you over pay your M'g and are paying back capital, you are not reducing your profit. Infact this my reduce the interest you are subject to and further increase your profit... dam tax.

 

[saorbust]

Interest at the moment - we are watching it though - thanks......

 

[Peterdon]

Back to original question.

If you have suffered (NOT made) a loss in previous years on your rental you can carry it forward to be set off against future profits.

Pedantic bit - You make (or enjoy) a profit, but suffer a loss.

 

[Piff]

Thanks for all the replies spoke to a fella i know whos got 16 houses so hes much more up to date than me and hes pretty certain as its not betterment and is just a repair especially as could be classed as health and safety i should be fine.

Nice to make a profit, as for last 3 years its either just broke even or cost us, but we bought it for the long term and it was a very good price so okay so far.

Would like some more, need big balls though

Houses are like food and water people are always going to need them.



Lynall

Bought one in the last recession - cost £18k, now worth £80k even with the current recession.
Would love to buy more but as you said, needs big balls & my missus doesn't have these.
She moans when we have a problem tenant, but quietly accepts the rent at other times!
Sounds like your path/patio problem is maintenance & is therefore tax deductible. Only improvements are exempt.

 

[wemorgan]

BBC NEWS | Business | House prices rise most in 5 years

The BBC and other journalists may say they are simply reporting the facts but I disagree. This is weak journalism. I suspect that the sample size of the number of houses being sold is much smaller than in previous years. So a 1.7% rise may not be statistically significant. These type of reports just pump up the markets IMHO.

 

[PXW]

I *think* you need to speak to your accountant - if by over-paying you are paying back some of the capital loan rather than interest, you could be in trouble - it is only the interest that is tax-deductable, not repayment of the loan itself?

So if you are repaying the loan and reducing the ammount you owe, you are still makig a profit and the taxman will want a slice...

(But if you are paying off interest, I see no issue!).

Spot on. Only the interest component is deductible against tax, the capital element is not, so overpaying does nothing for your tax bill.