Tax implications of renting family home

I bought my first home several years ago and lived there for a few years. I then moved out and rented out the house. I was assuming that I could deduct the mortgage interest on this house from the rental income to reduce my tax liability. I have recently told that you cannot do this and that my tax liability is on the full rental income (less any expenses).
Does anybody know if this is true?

You can deduct the interest on the mortgage provided you are registered with the PRTB.

Who told you that you could not write off interest on the outstanding loan against rental income? They were completely wrong as Nige says. Also this thread might be of interest to you:

Interest only mortgage for investment property

When did you buy and when did you leave and rent it out? Just wondering if you have an outstanding stamp duty clawback liability?

An accountant told me that since the property was previously my residence that I couldn't use the mortgage interest to offset the tax due on the rental income.
Property bought in 97 and left and rented out in 2001.
Is there a SD clawback liability!!!

JulyBaby said:

An accountant told me that since the property was previously my residence that I couldn't use the mortgage interest to offset the tax due on the rental income.

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That is incorrect as Nige said above unless there are other details which you have not posted. Assuming that the outstanding mortgage was used to purchase/renovate the property and not for other purposes (in part or full) you can offset interest on the outstanding amount against rental income.

Property bought in 97 and left and rented out in 2001.
Is there a SD clawback liability!!!

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I believe that the 5 year rule applied here (i.e. you were liable for the SD clawback if you rented out a former PPR within 5 years of purchase) so it looks like you have an outstanding liability which is 7 years late! The clawback involves the payment of the difference between the SD that an investor would have paid on the original purchase less whatever you actually paid (which could be nothing on a new build etc.). You need to talk to a professional about this.