Income from property

Claim expenses

Claim expenses (pro-rata in proportion to percentage of property let):

• Business rates/ Council Tax
• Water rates
• Electricity/ gas
• Property insurance
• Managing agents' fees
• Service charges
• Advertising
• Repairs and renewals
• Cleaning between lettings
• Garden maintenance
• Accountancy
• Bad debts written off
• Wear and tear 10% x (Rents less Rates, Council Tax, Water rates)

Capital Gains

Gain on sale of property will be apportioned over period of ownership between periods let and not let.

Final three years of ownership are exempt if property has been used as main residence.

For example:

• Owned for 10 years, let years 3 & 4, gain x 2/10 taxable
• Owned for 10 years, let years 9 & 10, no taxable gain

The capital gains annual exemption 2005/2006 is £8,500 per person.

Gains are taxed at 20% or 40%.

Benefits

Taxable benefit of living accommodation provided by employer:

• Annual value of property - ie. letting value (less any contribution/ rent paid by employee)
• Council tax - if paid by employer

Contact us

This tip sheet is provided to you completely free of charge but if you would like further information please call us now to arrange a meeting.