Self Assessment - what to include

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Chocs
    started a topic Self Assessment - what to include

    Self Assessment - what to include

    Hi, I'm a first time landlord filling in my first time self assessment tax form, so apologies if these are stupid questions, have had a look through forum but couldn't find conclusive answers.

    My sister and I jointly inherited a flat complete with tenant last summer, I bought her half so now own it all. Can I claim legal fees for this purchase?

    Six months later the tenant trashed the place and left. At that time I had received £3200 in rent. Following the tenant's departure the costs of putting it all right again, repairs, decoration, reflooring throughout (she'd had a dog in there), new locks, (didn't bother to refurnish, now let as unfurnished), anyway these costs came to considerably more than I'd had in rent. I did the cleaning myself. These works were all done round about end March, April, so some within 17/18 tax year. I think I can claim for direct replacement (curtains, toilet seat etc). Can I claim for all the other work under repairs and maintenance and are these costs included in my return if they were incurred before 6 April, of if paid before 6 April? Can I claim for the cleaning I did myself and eg the special uplift to take away all the broken furniture we lugged down the stairs?

    Then costs of getting new tenants - safety checks, new smoke alarms, agency to advertise and do paperwork etc. I know I can claim for the let only service, but can I claim for the checks - gas, EICR, legionella etc and additional work required to bring up to new standard?

    Grateful thanks to anyone who can advise.


  • Chocs
    replied
    Thank you both very much, will get back to it today now i have a better idea what I'm doing! What a helpful place this is

    Leave a comment:


  • Gordon999
    replied
    Your tax return for 2017/2018 to report rental income would include the rental income of £3200 and expenses paid to cleanup incurred up to April 5th. and any loss in 2017/2018 is carried forward to next year's tax return. The bills paid for clean up in flat after April 6 are entered in the tax return for 2018/2019. The bills paid to service providers are allowable expense against rental income but charging for your own labour is not allowable expense. For the cost of writing off the value of broken furniture and taking away- you need to check with Hmrc's hotline.

    The money paid to sister for half share plus the legal cost for transfer is "capital cost " and is not an expense which can be set against rental income. After you sell property in the future , you will deduct these costs from the sales proceeds to calculate the capital gains and you will be charged cgt.

    Leave a comment:


  • jpkeates
    replied
    You can't claim for the legal fees for the purchase against income - you can claim them when you sell the property (assuming the tax rules are the same then as they are now). The legal fees are a capital item, not a revenue item. If you took out a mortgage to fund the purchase, fees associated with the borrowing are allowed (but are capped).

    There are two ways of completing a tax return. On a cash basis or an accrual (accounting) basis. For the cash basis, you account for income when it's actually received and costs when they are paid. On the accrual basis you show income when it's due (whether it's paid or not) and costs when they're committed, not when they're paid.

    You can't claim for your own labour or time.

    All of the costs that are incurred solely and exclusively for the business are allowed. Unless I've missed something, everything you've listed can be offset against income. As this will result in a loss, you want to carry forward that loss into the next tax year, so you can offset it against the next year's income.

    Leave a comment:

Latest Activity

Collapse

  • Maintenance payment flow of funds
    Kots
    Hi all,

    I am one of three flats and I own a share of freehold. We've setup a company to deal with the day-to-day matters such as maintenance payments and such.

    One of the freeholders, who is also a director of the company, usually arranges quotes for maintenance works and insurance...
    15-10-2019, 05:10 AM
  • Reply to Maintenance payment flow of funds
    Kots
    Thanks for your replies.

    We are tenants in common and although the initial idea was to pay funds in advance, I am not for this so the plan would be that funds are paid as they are required.

    What about HMRC, does anybody know if I'd be unable to offset these payments against...
    16-10-2019, 14:08 PM
  • Reply to Maintenance payment flow of funds
    leaseholder64
    I'm not clear as to whether the company is the actual freeholder, or you are tenants in common. In the latter case, setting up a company is an unnecessary expense, which probably cannot be fully funded from the service charges.

    Also I'm not clear as to whether any service charges are paid...
    15-10-2019, 10:09 AM
  • Reply to Maintenance payment flow of funds
    Gordon999
    It is better for the service charge money to be kept in a separate current account because the bank statement records can be made available for inspection by any leaseholder. The unspent service charge money / funds should not be mixed with a business account belonging to one of the leasehol...
    15-10-2019, 07:05 AM
  • CGT Relief for PP ?
    JimmyJ
    This relates to a property that was our family home for a number of years then which we rented out for a number of years and which we then sold. I understand about the CGT reliefs for private residence and rental periods. But when we put it on the market we were advised by the agent to a) repaint the...
    12-10-2019, 08:38 AM
  • Reply to CGT Relief for PP ?
    Gordon999
    The work ( painting rendering ) was requested by the estate agent and should be charged as a " sale preparation cost " . This cost should be treated as similar to estate agent's commission and advertising cost , and charged against the sale price ....
    12-10-2019, 21:01 PM
  • Reply to CGT Relief for PP ?
    AndrewDod
    Disagree with you on this one JP. HMRC give pretty clear examples:

    Explanation A repair to an asset restores it to what it originally had been and is normally an allowable revenue expense. For example the cost of replacing roof tiles blown off by a storm. The cost of alterations, however,...
    12-10-2019, 19:12 PM
  • Reply to CGT Relief for PP ?
    JimmyJ
    Just to clarify. It was empty at the end of the previous tenancy because the tenants didn't want to renew for a short period and I didn't want to renew for a year , so as not to compromise the sale. During the empty period I tried to let it short term but that did not happen....
    12-10-2019, 13:16 PM
  • Reply to CGT Relief for PP ?
    jpkeates
    A property remains part of a rental business until sold*, even if the last tenancy ends some time previously.
    Painting to increase the capital value can be a capital expense (or could equally be maintenance).

    *Or the landlord moves into it, converts it to a holiday let etc etc.
    12-10-2019, 12:47 PM
  • Reply to CGT Relief for PP ?
    AndrewDod
    Although painting is never a capital expense unless it is something highly unusual. Not everything is a capital expense - especially if it replaces or maintains something that was there. If the repair is something that tends to be reoccurring or could be recurring -- repair of existing appliances,...
    12-10-2019, 11:30 AM
Working...
X