Split general expenses across my JV portfolio for tax return?

by Readers Question

16:04 PM, 29th June 2016
About 2 years ago

Split general expenses across my JV portfolio for tax return?

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Split general expenses across my JV portfolio for tax return?

I have now bought 2 additional properties on top of the one I already owned (100%). These 2 new properties (one single let and one Multi-let) have been bought with my wife (50% / 50%) and one with my wife and a friend as JV (not declared on the completion statement) which is in fact split 50% (me & wife) / 50% (JV). profit

I have also signed up for property training to improve my skills. Can I offset the cost of my training (1500£) against my rental income? I pretty sure I can looking at HMRC rules as it is wholly & exclusively related to my property rental activities.

Now, do I have to split the £1500 across the 3 property (1/3 each) or can I choose to allocate this against my 100% house rental income only to be more tax beneficial. What is the rule accepted by HMRC on that situation please? Same for my NLA or my other allowable expenses (phone, stationary…) which are not related to one house but to all my portfolio?

One of my property buddies has done similar deal and their accountant seems to put his general cost against the 100% to get the maximum tax efficiency? Is that allowed as I’m a bit surprise it is.

With the one in JV, I’m not sure if I need to split the rental income 25% (me) / 25% (wife) and 50% JV or 50% me or wife? and 50% JV or simply 50% me and 50% wife as the JV is not on the completion statement, but a JV contract has been signed.

I have looked at HMRC and struggling to find an answer. Again here, my colleague have done similar deal and their accountant have split 50% JV & 50% him (as not split between him & his wife). All very confusing. I know I will need to seek more advice but if you can give me your thought please.

Thanks in advance for your help.

Emmanuel



Comments

Kate Mellor

12:41 PM, 1st July 2016
About 2 years ago

Your training costs are not a Capital Expense for tax purposes so they don't get allocated to a specific property. You would declare all your income from various sources and your training costs are just a deduction from your gross income.


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