I lived in my residential property for three years, but had to move to central London as strikes on the rail services severely affected my work life. I now let my property and am renting myself as well. The amount of rent I pay is much higher than my rental income. Do I still need to pay tax on my rental income? May I deduct any part of rent expenditure from tax?
Arthur Weller replies:
Unfortunately, you need to pay tax on your rental income in the regular way, without taking into account the fact that you are paying rent yourself. The tax rules say that the rent you pay is a personal expense, unrelated to your rental business, and therefore not an allowable business expense that can reduce your taxable rental income.
This question was first printed in Tax Insider in November 2018.