£1000 income allowance?

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    £1000 income allowance?

    Doing my taxes and have come across this £1000 income expense allowance, what exactly is it and how does it work?

    #2
    It's a simplified tax allowance.

    First of all, if your income from property is less than £1000 in a tax year, you don't have to pay any tax on it.
    That's pretty unusual in practice.

    You can claim £1000 of allowance against income without providing any detail (or actually incurring any costs).
    You can't claim any other allowance against income on the same return.

    You can't use the £1000 to create a loss that you then carry forward.

    If the property income is joint, each person can claim the allowance.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Originally posted by jpkeates View Post
      It's a simplified tax allowance.

      First of all, if your income from property is less than £1000 in a tax year, you don't have to pay any tax on it.
      That's pretty unusual in practice.

      You can claim £1000 of allowance against income without providing any detail (or actually incurring any costs).
      You can't claim any other allowance against income on the same return.

      You can't use the £1000 to create a loss that you then carry forward.

      If the property income is joint, each person can claim the allowance.
      Sorry I don't quite follow isn't this £1000 based on expenses and if they are not high I just take this allowance and obviously the income of rent is greater than £1000 so can this still be used? When do people choose to actually use this allowance instead?

      Comment


        #4
        You can only use all of the £1000 if the income is more than £1000, otherwise the amount you can claim is capped at the amount of the income.

        The £1000 isn't "based on" expenses, it's instead of claiming for actual expenses. It's essentially an additional tax free allowance if you don't have a lot of income or expenses.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment

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