I have a property in London, currently my main residence, and…

HiCustomer/p>

You can own as many properties as you like, but yes there are tax implications as to the property that is not deemed to be your main residence.

When you start renting out the property in London, you need to keep records of rents received, and any expenses incurred in letting out this property, such as interest on any outstanding mortgage, any insurances paid, any maintenance, etc etc

If you hand the rental over to a managing agent, then any fee they charge you also is a allowable expense to deduct from rental profits.

You will need to inform the tax office, of the commencement of this rental income and each tax year they will send you a self assessment tax return which will include a supplementary page for you to declare this rental income.

Any profit you have made, will be added with other income you have, such as employment/self employment and you will be charged tax at the appropriate rate. This 20% as a basic rate tax payer, but if you total income is more than £40835 then you will pay tax on anything over and above this amount at 40%.(for 2009/10 tax year this figure is £43475)

If, and when you come to sell the London property, if more than 3 years later,you will be subject to Capital Gains tax, the time it was your Main Residence will be taken into account, as will any the value of the property at the time the letting began, read here for more information about capital gain tax, for future reference.

Thanks for your question