£1k property tax allowance?
Hi, I was looking something up and came across this on HMRC website. I have 4 mortgage-free properties and work full-time elsewhere. Do you have to claim this £1k on your tax return (as a personal not business landlord) or is it included in their calculations once you submit your tax return?……….
>> https://www.gov.uk/renting-out-a-property/paying-tax “……Property you personally own
The first £1,000 of your income from property rental is tax-free. This is your ‘property allowance’.”……..
Perhaps I am missing something?
Property you personally own
The first £1,000 of your income from property rental is tax-free. This is your ‘property allowance’.
Contact HM Revenue and Customs (HMRC) if your income from property rental is between £1,000 and £2,500 a year.
You must report it on a Self Assessment tax return if it’s:
- £2,500 to £9,999 after allowable expenses
- £10,000 or more before allowable expenses
Jackie
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Member Since January 2020 - Comments: 1102 - Articles: 1
12:50 PM, 18th November 2022, About 3 years ago
I think (not sure) that in the self-assessment process you are given the option to claim the allowance, but if you do, you cannot claim any of your expenses, see:
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
Member Since January 2022 - Comments: 61
12:56 PM, 18th November 2022, About 3 years ago
Jackie
The £1,000 property allowance puzzles me too. Do we deduct it prior to accounting income/expenses calculations?
My wife and I are joint 50/50% owners and each are allowed to split the above figures but do we each get the £1k allowance?
Also do the income levels quoted apply to each of us or are they applicable to the single property we rent out?
Member Since October 2013 - Comments: 48
1:16 PM, 18th November 2022, About 3 years ago
‘Allowances
Property allowance
You can claim the property allowance and get up to £1,000 a year tax-free property income.
If you claim the property allowance you cannot claim a deduction for your expenses.’
Taken from https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income ( about half way down the page)
Member Since June 2019 - Comments: 73
5:34 PM, 18th November 2022, About 3 years ago
Reply to the comment left by Seething Landlord at 18/11/2022 – 12:50
Thanks Seething L. On reflection I think you are right. The tax return on reflection gives you the opportunity to claim £1k or expenses (which includes repairs etc). As expenses for me are always more than £1k I go for that box and put in the relevant figure. Did not have a copy of tax return to hand to look at question asked. I blame it on old age.