Costs you can deduct from income tax when letting out a property

[LOVELYDOVEY05]

I understand things like building insurance, letting agents fees can be deducted from income tax. Is this correct? Do you get this over and above the personal allowance? So for example if you get £10, OOO pa gross rent and say your lettings fees are £1,000 only £9,000 would be liable for income tax and so you just add this to any other gross income you have to declare?

you do one tax return for the lot - you just add a property page. Yes, your example is right but it is all added together.

you will need a lot more insurance than just buildings. You can also deduct costs of repairs (if you get a wrecker) and maintenance such as gas safe.

BTW you can't charge for landlord time (reasonably enough) - which is fine when it is just the clericals but less so when you are spending two weeks cleaning up filth.

and rental income is classed as unearned (the revenue clearly read the Guardian) so can't be used to up your pension.

Thanks very much. I forgot about the gas safety check being deductible but it does make sense as it is an essential thing.
Insurance: I intend to take out at least non-payment of rent insurance. Is it worth joining something like the NLA? Do they negotiate to get any discounts?
Interesting. You can claim if you get a wrecker but no general repairs like replacing the carpet or updating the kitchen?

Maintenance costs but not improvements. You used to be able to offset mortgage interest but think that may have changed.

But improvements can be set against capital gains tax.

Carpets are assumed to have a definite life of around 8 years and replacements are part of your c osts, ditto kitchen and painting.

And yes, relief on mortgage interest is gone or going . Higher electrical safety standards coming ( needs to be safe anyway of course) .

You need rent guar antee, legal expenses, malicious damage, home emerg ency. Make sure your tenants meet spec. All the competent eviction firms charge the same on top of the court fees.

Excuse spaces, mn have stuffed up the site again and any word correction adds a space you can't delete.

You can still claim an interest deduction but only at a 20% tax rate (still higher at the moment but that will be the eventual rate - for now anyway). You can also offset mortgage arrangement fees in full (you do do need to accrue for them on the same term as the mortgage though). Costs such as council tax, interest, electricity, gas etc can also be set off during void periods as long as the property is available to let. The property page on your online tax return is quite straight forward and will work out how much interest you will be allowed to offset based on your total income.

Special, you say make sure your tenants make spec .What exactly does this mean? How can you ever be sure? What if their referees are friends of their and tell porkies for example ? (I suppose always get in writing)

If you are PAYE, then your allowance will be set against your employment and tax is then charged on any other income.

For the tax return that's just arrived I will be deducting mortgage interest at the new percentage, letting agents costs, insurance, repairs (damp treatment), redecoration, gardeners, chimney sweep, boiler service, council tax, utilities for when there was a void period.

Doing the return keeps me occupied for a couple of afternoons in May. I need to get it done early this year so I can post it when I'm back in UK.

There's no defence against a determined liar, but the important thing is that the insurers agree cover for legal , rent guarantee and malicious damage. A social media stalk is also worth a go.

There's also no defence against someone falling.apart and drug cuckoos.