Mortgage Interest Tax Relief on Rental Property

I am currently living away from home for work and have rented out my solely-owned house whilst I am away. The house is mortgaged and my question relates to Mortgage Interest Tax Relief. My tenant moved in on 1st September 2022 and paid for one year's rental in two installments (September 2022 and March 2023) - I have thus received the entire rental income for that period in the tax year 2022/23 (net of agents fees etc). My questions are (1) Do I include all of the income in my 2022/23 tax return or just that portion relating to that tax year? (2) Can I claim Mortgage Interest Tax Relief in my current return for just the seven months of the rental that occurred in the 2022/23 tax year or can I claim all twelve months? If just 7 months, can I claim the remaining 5 months against rental income in the current tax year?

Hi Jeremy N,
Thank you for your question.
Where someone's income from proerty is less than £150,000 pa the cash basis is the default basis for reporting profits or losses.  
Under the cash basis, income is chargeable when it is received and expenses allowable when they are occurred.  
In your case, therefore, you would have to include all of the income received during 2022-23 on your tax return for that year but you could only claim the proportion of interest paid on the mortgage from the date the letting began up to 5 April 2023.  
Any interest paid between 6 April 2023 to Septemer 2023 could only be claimed against income received during 2023-24. 
Thank you. 

I am not a tax expert, but generally, you should include the rental income that falls within the tax year 2022/23 in your tax return for that year. As for Mortgage Interest Tax Relief, you may be able to claim it for the portion of rental income earned during the 2022/23 tax year. However, for specific and accurate advice regarding your situation, I recommend consulting a tax professional or HM Revenue and Customs (HMRC) in your country. They can provide personalized guidance on your rental income and tax relief eligibility.

Ask an accountant but though cash basis is default as mentioned by HMRC, you can elect out of that and to adopt the receipts basis instead which may be of benefit as regards relief for mortgage interest paid.