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Renting and tax ? Clueless... help!

(6 Posts)
unavailable Thu 09-Jul-09 22:45:24

OK, so now I am a landlady.This is so not me!

Bad luck has meant we are now renting out our house and renting another in the area we are moving to rather than selling up.

I know we have to pay tax on the rental income, and are treated as if this is a business (although it isnt)but I am confused about what can be offset against tax for maintenance/repair.

When we realised we would have to let rather than sell we agreed to change a very threadbare carpet. We also need to do some repairs to the roof and in the roof space that we only discovered needed doing because of our prospective buyer's survey.

Can we claim those against tax? We are not out to make a profit here, we plan to only rent for 1 year are just trying to break even.

unavailable Fri 10-Jul-09 09:31:53


HerHonesty Sat 11-Jul-09 10:09:54

there are two things you need to consider. the first is the income from the rental, the second is the income if and when you come to to sell the property. presume you are mainly concerned with the income side of things?

the rent is a source of income, but any costs you incur in generating that income is an expense:
this includes the interest on the mortgage, and insurance and replacement/repair of good and property etc whilst the tenants are in the property.

techinically speaking then, replacing the carpet before the tenancy began is not an expense but that cost can be carried forward to offset agains a potential capital gains tax bill which if you only rent out for a year you probably wont be liable to.

if you can do the repairs to the roofspace whilst the tenants are their then that is probably a good idea as you can offset that again rental income - if you technically loose money over a tax year - ie you pay out more than you get in rent, than you may even get a tax refund on other income tax paid over the year (if you or dp work).

note i am not a tax inspector! and other MNers may have a different perspective on the carpet issue.

LIZS Sat 11-Jul-09 10:12:59

Probably - maintenance is allowable but not improvements (ie adding a conservatory)

HerHonesty Sat 11-Jul-09 10:17:08

sorry, lose money. and there not their. brain in saturday gear.

LovingTheSunshine Sat 11-Jul-09 10:34:57

Have a look on the HM Revenue & Customs website & there will be a help sheet which will tell you what expenditure you can & can not claim against the property income.

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