If you’re a residential property landlord, then don’t miss out on these tax relief options available to be used against your rental income. Read on to find out more.
A common misconception which you may have heard is that legal costs associated with the first time you let your property are not tax deductible. This isn’t true 100% of the time. If your first let is for no longer than 1 year than the legal expenses incurred can be considered tax deductible.
If your first lease is for longer than 1 year then you may be
able to deduct your legal expenses if your tenant renews their lease. Legal
expenses are tax deductible on lease renewals which are for less than 50 years
and don’t include a lump sum payment or premium.
Types of deductible travel expenses:
If travelling “wholly and exclusively” to deal with a rental problem, or to visit your rental property, then the costs incurred are tax deductible. If you’re using your car you can claim a proportion of your motor expenses, or use HMRC’s mileage allowance which is usually more generous and easier to work out.
Capital allowances for your rental property:
You can’t claim capital allowances for equipment bought to
be used by the tenants renting your property. You can however claim capital
allowances for the equipment you buy to run your rental property business. This
could be tools, with a life expectancy longer than 2 years, or even a computer.
However, these expenses must be proportioned to account for the use of these
items in non-business activities. Tools with a life expectancy of less than 2
years are tax deductible, regardless of capital allowances rules.
We’re experienced tax advisors , qualified to help you with your rental property income. Give us a call on: 01273 882200 to discuss your situation more in depth.
If you’d like more information on buy-to-let taxation see our other blogs in this series:
All details above were correct at the time of publishing - for more up to date information please get in touch.
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