property and investment income
Our aim is to put our clients first - to understand their situation and provide a first class service.

 

Any income from land and property is taxed as property income.

There are some allowable expenses which you can claim to reduce the tax liability

• Insurance
• Utility costs
• Agents fees and other management expenses
• Repairs & Maintenance
• Interest on a loan to acquire or improve the property
• Irrecoverable debts

Any expenditure incurred before letting commences is allowable under the normal pre-trading expenditure rules.

Furnished Holiday Lettings

To qualify as a FHLA, the accommodation must be satisfy all of the following conditions

• The property is situated in the UK or EEA, furnished and let on a commercial basis
• It is available for commercial letting, to the public generally, as holiday accommodation for not less than 140 days a year
• The accommodation is actually let for at least 70 days a year
• The accommodation is normally not less than 31 consecutive days to the same person.
• Where there is more than one property, the 70 day test is satisfied if the average number of days let in the year is at least 70.

Rent a room relief

When an individual lets furnished accommodation in their main residence, a special exemption applies

• If the gross annual receipts (before expenses or capital allowance) are £4,250 or below:
The income will be exempt from tax
can elect to ignore the exemption for that year if a loss is incurred.
• If the gross annual receipts are more than £4,250
The individual may choose between

- paying tax on the excess of the gross rent over £4,250
- being taxed in the ordinary way on the profit from the letting(rent less expenses)