New property rental business and what costs can I deduct?

New property rental business and what costs can I deduct?

8:35 AM, 28th October 2016, About 7 years ago 1

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I created my property rental business back in March this year and currently only have 1 property in the business (I have one in my own name, but that’s irrelevant for now). I’ll be buying another 8 to 10 in the foreseeable deductable

I have an accountant and have followed all correct procedures etc. and all is going fine. The question I have is (which I’m yet to discuss with my accountant) when my tax is due, am I able to write off every business expense just like you would in a normal business?

For example, I’ve had to renovate the property, pay council tax, bills, buy a laptop, pay the mortgage, fund the business with a personal business loan etc.

Are all of these costs deductible against the rental profits I’ll have made? Or is it the same as when you’re renting as an individual, whereby it’s split by capital gains and rental profits? (i.e. I couldn’t deduct renovation costs from my rental profits, but I could deduct them from capital gains tax if I was to sell).

Hope this makes sense.

Thanks in advance.


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Neil Patterson

8:38 AM, 28th October 2016, About 7 years ago

Hi Kozie,

From the .Gov site >>

Property owned by a company

Count the rental income the same way as any other business income.
Costs you can claim to reduce tax

There are different tax rules for:

residential properties
furnished holiday lettings
commercial properties

Residential 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 or renovating it beyond repairs for wear and tear.

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