Do you have own a rental property?
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.
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, like:
* 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
* 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.