Personal Tax - Property Income

Personal Tax - Property Income

1. Allowable Expenses - must be incurred 'wholly and exclusively' for the purposes of letting

   • Day to Day expenses
     • Repairs and Maintenance
     • Redecoration
     • Cleaning/gardening
     • Council Tax
     • Water Rates
     • Advertising
     • Insurance
   • 'Getting the property ready to rent
     • Agent's commission
     • Interest on loan to acquire/improve property
     • Professional and legal fees

2. Income

   • from renting out land
   • from renting out unfurnished property
   • from renting out furnished property
     • Capital expenditure on furniture is disallowed
     • Wear and Tear Allowance allowed
       • 10% of rent received (after deducting only rates [general and water] and council tax [where applicable] from the rent
       • Cannot be claimed for holiday lets
   • Use accruals basis
   • Determine assessable rent receivable
   • Less, allowable expenditure
   • Create a table for several properties
   • Rent a room relief
     • Lodgers
     • B&B
     • If gross income is more than £4,250 a year may be better to calculate profits in usual way
   • Holiday lets
     • have a different page on tax return
     • Rented out to tenants for less than 31 days
     • B&B
     • Caravans
     • Cottages

3. Disallowed expenditure

   • Capital expenditure
   • Private use of property by owner

4. Losses

   • Can be carried forward
   • Will always be nil can't use negative numbers