Bookkeeper in Mudford, Yeovil serving Yeovil, Sherborne, Langport, Wincanton, Somerton and surrounding areas of South Somerset and West Dorset.
Summary of allowable expenses which landlords may deduct from rental income for tax purposes
Using rates applicable prior to April 2016
NOTE: different rules apply if you rent out property for holiday lettings. This is classed as trading income, not
If property is owned jointly by two persons - as is the case with property owned by a married couple - then
each owner or spouse is usually assessed for one half of the property income.
The following expenditure and allowances may be deducted from rent in calculating taxable property income:
REPAIRS TO PROPERTIES: Repairs to properties, including decorating, are allowable expenses. However
work that leads to an enhancement in the value of the property, such as extensions, are NOT allowable.
AGENTS FEES: Sums paid to a letting agent are allowable expenses.
OTHER MANAGEMENT EXPENSES
CLEANING OF PROPERTIES
INTEREST ON LOANS TO PURCHASE PROPERTIES: However companies must offset this interest paid against
interest income, not property income.
WEAR AND TEAR ALLOWANCE - Furnished Properties only: . Where properties are let furnished an allowance
valued at 10% of the rent received may be claimed. The rent received must be that rent remaining after deduction of any
council tax, business rates or utility bills included in the rent.
MAINTENANCE EQUIPMENT: Capital allowances are not available for the purchase or improvement of properties to rent. However capital
allowances may be claimed for equipment used for the cleaning or maintenance of the properties.
RENT-A-ROOM SCHEME: Individual persons (but not companies) who rent out a room in their own homes may claim a tax-free allowance
instead of the above expenses. Until the 2016/17 tax year this allowance was set at £4,250. In April 2016 it was
increased to £7,500.
For help with self-assessment tax contact Four Elms Bookkeeping.