I am an IT contractor working in London during the week and own two properties, one outside of London (Surrey) which is my current ‘home’ address, and also a property I purchased in March in London.
I rent a property in London for the purpose of the business – of course, I can put this through the business as a tax-deductible expense. However, going forth, I am considering two options. Either:
Based on the above two options, I would like to know which would be most financially efficient in terms of taxation.
I can do the sums myself, but I'd just like to be pointed to what the rules might be in this slightly complicated couple of living arrangement options.
Thanks!
I rent a property in London for the purpose of the business – of course, I can put this through the business as a tax-deductible expense. However, going forth, I am considering two options. Either:
- Renting out my owned London property at around £1600 per month. The mortgage payments are £1204 per month, the interest currently being approximately £930 of this. I would then continue to rent (currently £1473 per month) claiming this as a business expense.
- Living in my owned London property, in which case, is there anything I can put as an expense through the business such as the mortgage payments/interest if I am living there purely for business purposes as my home property is in Surrey? In other words, I would be paying the mortgage on both properties without any rental income from either because the Surrey property is my home base, and I am using the London property to live in during the week when working in London, effectively missing out on potential rental income. What financial breaks can I gain from this arrangement, and which would be more financially efficient – to have my Surrey or London property as my Principle Private Residence with HMRC?
Based on the above two options, I would like to know which would be most financially efficient in terms of taxation.
I can do the sums myself, but I'd just like to be pointed to what the rules might be in this slightly complicated couple of living arrangement options.
Thanks!
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