Anne & Henry are thinking of buying a retirement cottage in Cornwall, and renting it out until they retire.They have found one they like costing 275,000; they will use an inheritance of 65,000 from an aunt as the deposit.They will need to borrow the remaining amount for the purchase of this holiday cottage. They have asked you to research and find a suitable buy-to-let mortgage, a real mortgage, currently available.

Local agents have estimated that the monthly rent may be 2,400 in July & August, 1,800/month in April, May, June, September & December, and only 800/month in March and October.They do not expect that the Murrays will receive any rent in January, February or November. They would charge a 10% (of rent) agent's fees for managing the property.

The Murray's have estimates of the other costs as follows:

Repairs and maintenance per year

1000

Property insurance per year

475

Surveyors fees

300

Solicitors conveyancing fees

850

Cleaner

820

Required:

a)Find a real buy-to-let mortgage for the Murrays and explain the details to them.

b)Which of the above expenses can only be claimed against Capital Gains Tax?

c)Calculate the net annual income that the Murrays can expect from their rental property.

d)Calculate the return on the income from their investment (ROI).

e)Calculate the SDLT on this purchase.From which tax can this be deducted?