Tax Allowable Expenses

You are allowed to offset allowances, expenses and deductions to reduce the tax bill on your rental profit or create a deficit that can be used against other property income, but some items are improvements and these are used to increase the acquisition value.

Council tax, water rates, mortgage interest, repainting and structure insurance are obvious. Others are trickier. What about replacement windows are these just replacements of the wooden frames which means that the cost can be claimed against rent for tax purposes or it is an improvement to the property and therefore an allowance for Capital Gains Tax purposes?

If the property is let fully furnished you can claim a 10% deduction for wear and tear (sometimes this is beneficial).

There are allowances for environment friendly improvements (up to 100% of cost) that can be set against the rents received for tax purposes. The means that the total cost paid out of your pocket is tax deductible and hopefully the improvement will increase your rent!

Furnished Holiday Lettings (Holiday Lets) have different rules and allowances. This means that you must be careful as to which set of rules apply.

The Inland Revenue consider that the letting for longer than a month is normally an investment whereas a Holiday Lets is treated as a business. A business can claim more generous expenses against rental income.

How can we help

This is a complex subject and our professional advice and experience can ensure that you benefit from claiming the maximum against the rental profits. Thus reducing your tax bill.

As Court decisions, changes in the Law and how the Inland Revenue interpret it all affect what can and can not be claimed.

We are here to help so please get in touch. An extra bonus is that our fees are a tax deductible.

Tax Allowable Expenses

How can we help

Questions about Tax Allowable Expenses

Further Reading on Tax Allowable Expenses