Tax on a let property

Hello,
I have paid my mortgage completely on my property which is valued at 180k. I want to move to a bigger property. The bigger property is 230k. I want to rent out property one ( hopefully, over 20 years house prices will go up and I'll make a profit). So property one will become a business (residential let). In order to be able to do this I will take out an interest only mortgage on property 2 (175k), and pay 55k cash.
My question is, do I have to pay ax on the £600 rental income on property one? Or is this offset by the £600 interest I'll be paying on property 2.
The only reason I will be taking a mortgage on property 2 is to fund the business (property 1).

Thanks in advance!

Comments
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Yes

Kent accountant |
Kent accountant's picture

Why must it be on Property One?

jpcentral |

You are correct

BKD |
BKD's picture

Example 1

jpcentral |

Working capital and purpose

BKD |
BKD's picture

Thank you for your replies. I

Cariad71 |

Again, purpose

BKD |
BKD's picture

No, I want to move to a

Cariad71 |

Don't confuse ...

BKD |
BKD's picture

Bridging Finance

George Attazder |
George Attazder's picture

I've just spent half an hour

Cariad71 |

They also pointed me in the

Cariad71 |

@cariad71, why don't you just remortgage

justsotax |

Now there's an idea! Buy to

Cariad71 |

Do not ever trust tax advice from HMRC

Chris Smail |
Chris Smail's picture

Isn't it just shocking how simple

justsotax |

Advice from HMRC over the telephone

v k ratliff |

Provision of working capital

jpcentral |

Timing

BKD |
BKD's picture

George has the right answer.

pauljohnston |

Is there a business yet

brian.barrett |

What about renting out the new house first?

cfield |
cfield's picture

Alternative scenario

Marco Martin |

I believe this is what is happening

brian.barrett |

I don't think a PPR election would be relevant to the OP

ACDWebb |
ACDWebb's picture

Look at the whole picture

Steve Carlson |