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Re:Tax relief for residential landlords

19/11/2018 12:06:11
Thank you for your question.

To clarify, if you did not claim the £1000 Property Allowance you can claim for the mileage expenses incurred in visiting your properties. Part business and part private - Where the business element and private element can be separately identified, the business element is an allowable deduction.

You must keep clear and complete records in support of any claim you make. Where there is no way to separate the business and private elements, no deduction is allowed. For example, a journey might be for a combined personal and business purposes.

I hope this helps.
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Tax relief for residential landlords

19/11/2018 13:51:38
Correct me if I am wrong but there is not a blanket allowance of £1,000. There is an exemption if your gross income is £1,000 or just above £1,000. This is where the Forum fails. You have to comprehend the exact position before responding.
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Re:Tax relief for residential landlords

20/11/2018 11:28:08
The £1,000 Property and Trading Allowance can be used if your gross property or trading income is under £1,000, this is known as full relief, or if your gross income is over £1,000 you can still use the allowance, this is called partial relief.

To assist you further please see the guidance in the links below:

Income tax when you let property: work out your rental income

Tax-free allowances on property and trading income

If you have further questions or would like to discuss your own circumstances with us you may wish to contact us on 03000 200 3300 and request to speak to a Technician who will be able to assist you regarding your tax affairs.

This message was edited 1 time. Last update was at 20/11/2018 13:40:28

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Tax relief for residential landlords

22/11/2018 09:49:46
The phasing in will be as follows: 

• 2017-18 - Claim 75% as normal, claim 25% as a tax adjustment at basic rate. 

• 2018-19 - Claim 50% as normal, claim 50% as a tax adjustment at basic rate. 

• 2019-20 - Claim 25% as normal, claim 75% as a tax adjustment at basic rate. 

• 2010-21 - No claim as normal, claim 100% as a tax adjustment at basic rate. 
I think you mean 2020-21. Sigh*
How this relief will be calculated means some interest repayments (which should be treated as a loss) will be taxed as profit. They're out of the account - gone - so why are being taxed! Surely that contravenes the laws of taxation!
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Re:Tax relief for residential landlords

22/11/2018 14:54:26
Thank you for your question.

I have now corrected the error on the original post.

For the year 2020-21 no deduction can be made for finance costs and will no longer be able to create a loss. The basic rate relief available is restricted to the lower figure of the rental profit, finance costs not deducted from rental income and the Adjusted Net income.

Where not all of the finance costs are used for the basic rate restriction in a year because the lower figure is rental profit or Adjusted net income, then the finance costs not used can be carried forward to be taken into account when the basic rate restrictor for the following year is calculated.

As ordinarily, a rental business loss can only be carried forward against the next available rental profit anyway, the overall effect will be broadly similar, apart from the fact that the finance costs are restricted to basic rate.

Guidance relating to this can be found at:

PIM2058

We would refer you also to the guidance below:

Tax relief for residential landlords: how it's worked out

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Re:Tax relief for residential landlords

12/12/2018 08:22:01
Am I to understand that we are to calculate 75% of the loan, if we put in the full loan amount it will not calculate the 75%?
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Re:Tax relief for residential landlords

12/12/2018 10:04:50
Hi,

Thanks for your question.

That is correct. When you are completing your return you will only enter 75% of the financial costs or loan interest in the relevant box.

There is then a box a couple of pages on where you will enter the remaining 25%. This will enable the calculation to give you the correct relief you are entitled to for the 25%.

I hope this helps.
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Tax relief for residential landlords

07/01/2019 07:33:53
Hi,

If I have rented out a property to tenants which caused damage (eg broken doors/oven/light fittings/showers), can I claim for costs to renew it to its original state if I am moving in afterwards? If I upgrade it, can I claim for a portion of the cost (ie what I would have paid to restore to original condition) or none at all? I do have another rental property to offset against.
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Re:Tax relief for residential landlords

07/01/2019 09:26:27
Thanks for your question.

You will not be able to claim expenses for repairs or replacement of domestic items if you are planning on moving into the property, because the rental income on that property has ceased.

I hope this helps.
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Tax relief for residential landlords

07/01/2019 12:15:18
I have a buy to let property and during the FY18 it was empty for five months resulting in a loss. I will therefore carry forward the 25% of the finance costs for basic rate relief next year. The 75% finance cost will also result in a loss for the year. Do I enter the 75% figure in the relevant box, or do I have to enter a figure that results in zero profit and carry forward the unused finance costs?
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Re:Tax relief for residential landlords

07/01/2019 13:26:07
Hi,

Thanks for your question.

You enter the 75% figure in the relevant box and carry forward the resulting loss figure.

I hope this helps.
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Tax relief for residential landlords

08/01/2019 12:40:28
Hi
Thanks for your answer re not being able to claim. But what if the tenants had caused the damage and the original plan after fixing it was to rent it out? The intention was still to fix it for rent. For example, if I had actually rented it out for a month after repairs, does that mean I would have been able to claim all repair expenses?

Thanks for your help
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Re:Tax relief for residential landlords

08/01/2019 14:29:27
Thanks for your further question.

Your question appears to be hypothetical and we cannot answer hypothetical questions.

Any expenditure leading up to the point when the property is next let is part of the rental business and can be deducted provided the expenditure is incurred wholly and exclusivley for the purposes of the rental business and is not capital expenditure. This is provided the property is then actually let again. Whether the property is rented out again or not, is a statement of fact.

You have stated that you moved into the property after the repairs were carried out, so the fact is, the rental income on that property has ceased, so the expenses cannot be allowed.

I hope this helps.
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Tax relief for residential landlords

16/01/2019 16:05:18
Hi,

I'm currently completing my tax return.
We renewed out interest only mortgage, and there was a fee, that was added to the amount of the mortgage. Am i understanding right this fee can't be deducted, as we're already paying the interest as part of the mortgage?

Thanks for clarifying,
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Re:Tax relief for residential landlords

16/01/2019 16:43:48
Hi,

Thank you for your question.

You are correct, arrangement fees incurred in obtaining loans to purchase let property are not an allowable as a deduction against the rental income.
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Tax relief for residential landlords

21/01/2019 08:08:29
Hi, I have two questions.
1) I have income from lodgers living in my home: total income from them in 2017-18 was £13,355. Their proportion of rates, insurance and utilities totals £6,435 so net income would be £6,920. Am I right that - this year - I am better to use the Rent-a-Room tax exemption rather than normal actual profit?
2) This year I replaced the central heating boiler - cost £7,400. Even with my other income (primarily state pension), that is more than the rest of my taxable income minus tax free allowance (this year, £2740) . Is it an allowable expense / can I carry remainder forward or claim back previous tax paid etc etc?
Many thanks

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