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Can I offset rental expense against rental income on my tax return?

If you currently rent out a property but live in another property on which you pay rent to a landlord you cannot offset the expense of your current rent against the income you receive from the other on your tax return.

Effectively, HMRC will look at it as though you run a business on the property receiving payment but will not consider your current rent paid as part of the business expenses because it, in reality, is not a business premises needed to run your rental income stream, it is just your home.

However you could deduct any mortgage or related repair and maintenance costs on the rental property against the income received from it.