how to pay less tax on a buy to let

A question about : how to pay less tax on a buy to let

Switching to a buy to let (interest only)and don't know which option is better -

A) pay of lump sum to bring down monthly payments

B) pay monthly over payments with profit through rent

I'm unemployed and my partner is full time 32K+ salary, were not sure which option is best - will we have to pay tax on profit before over payments?

Best answers:

• No idea, you don't specify how much the rent is for starters, whose name/s property is in etc.
• both a) and b) will result in you paying MORE not less tax as both are capital repayments so are disallowed when working out your taxable profit
  you are letting the tax tail wag the dog!
  if you pay off capital then the amount of interest paid to the lender decreases meaning your interest cost offset against rental income also decreases, so your net profit is larger and you pay more tax
  instead of obsessing about paying 20% tax, you should worry about whether the other 80% you get to keep is needed now or later.
  What is your exit strategy as shown in your business plan that you did when you first got into BTL?
  pay off lump sum now means large increase in your net profit so 80% of that is retained and can be used now to support your current lifestyle - do you need to increase your income now????
  make monthly overpayments and the same happens but more gradually
  do not pay off any capital and the max amount of interest goes against your tax. It is then a simple question of which is better, the amount of tax saved at 20% by keeping a big interest cost or the amount of interest saved by having a smaller loan - basic maths will give you your answer. the rest is irrelevant
• you pay tax on the income, less the interest you have to pay. So typically for every extra Ј1 you make, you pay 20p or higher tax. On this basis I would pay my own mortgage off before the buy to let mortgage.
  That's the simple answer, but you probably need to give more info for a better answer. Ie
  How many properties do you have and what do you owe on each. What rates of interest are you paying.