Property

Question 1

Let Property

Answer 1

• Profits taxed as non-savings income.
• Overseas property income taxed separately from UK property income.
• Expenses and capital allowances can be deducted.
• Assessable to income tax in the year the profit arises via self assessment.
• Any loss is automatically carried forward and set against future lettings profits.
• Gains on sale of property subject to CGT

Question 2

Rent a room relief

Answer 2

• Gross rental receipts < or equal to £7,500 in a year – no charge to tax.
• Gross rental receipts > £7,500 in a year – individual choice of either,
• Taxed on income less expenditure basis, or
• Taxed on amount gross receipts exceed £7,500 with no allowance for expenses.

Question 3

Let Property, Expenses, Allowances, Reliefs

Answer 3

Deductible expenses
•Repairs and maintenance (not cost of alterations or improvements)
•Interest payable on borrowing for the purposes of the property letting
•Replacement Furniture Relief (RFR) from April 2016
•Legal fees, professional charges, insurance premiums, utility bills if paid by the landlord

Capital Allowances
•Capital allowance deducted as an expense
•Plant & Machinery allowance is available for capital expenditure on equipment installed
•Not available for furniture used in residential property