Ok so this topic isn't the most exciting (dull more to the point and apologies for dropping this one in on a Monday!) but it is unfortunately necessary info. I like finding buy to let deals of the day far more than I do talking about property tax but its all stuff we need to know about and act upon.
Do you own a rental property in Teddington or anywhere else for that matter?
If your income from property rent is more than £2,500 a year you have to complete a self assessment tax return. If it’s less than £2,500 a year, you need to call the Self Assessment Helpline to report it.
There are different tax rules for residential properties, furnished holiday lettings and commercial properties and so lets look at how it works for residential properties which is bread and butter for most Teddington landlords:-
You or your company must pay tax on the profit you make from renting out the property, after deductions for ‘allowable expenses’. Allowable expenses are things you need to spend money on in the day-to-day running of the property, for example:
* letting agents’ fees
* legal fees for lets of a year or less, or for renewing a lease for less than 50 years
* accountants’ fees
* buildings and contents insurance
* interest on property loans
* maintenance and repairs to the property (but not improvements)
* utility bills, like gas, water and electricity
* rent, ground rent, service charges
* Council Tax
* services you pay for, like cleaning or gardening
* travel to and from your property if and when you need to visit
* other direct costs of letting the property, like phone calls,
* stationery and advertising
Allowable expenses don’t include ‘capital expenditure’ - like buying a property (repayment element of mortgage) or renovating it beyond repairs for wear and tear.
Hope that helps!
If you're female this will probably make you smile!
Rebecca Smith
