Are letting agent fees(2 year lease,change of tenant) considered allowable expenses

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    Are letting agent fees(2 year lease,change of tenant) considered allowable expenses

    This question is about allowable expenses for tax deduction.
    Are letting agent fees for a 24 month lease(with a 16 month break clause) after a change of tenant considered as revenue or capital expenditure?
    I use a cash basis for accounting. The fees were paid in two lump sums. One at the start of the tenancy, and another at the 16 month mark. Each sum was paid in a different tax year.
    Are either of these sums allowable for deduction for rental income purposes?
    To clarify, this is not my first tenant for the property but it is a change from one tenant to another, with the change in tenants for a 24 month lease.
    Thank you.

    #2
    Next time, 6 months (not 24 ) then periodic. Much more flexible for landlord, quicker eviction, more incentive for tenants to comply with tenancy agreement.

    By deduction do you mean for income tax?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Letting agent fees are expenses which are allowed against the rental income.

      Comment


        #4
        Absolutely northing at all to do with capital expenditure

        Comment


          #5
          Originally posted by AndrewDod View Post
          Absolutely northing at all to do with capital expenditure
          And even less to do with revenue-they are costs incurred as a consequence of trading.

          Comment


            #6
            Originally posted by gnvqsos View Post

            And even less to do with revenue-they are costs incurred as a consequence of trading.
            Not sure you understand the terminology. -- "costs incurred as a consequence of trading" - what exactly does that mean in this context that makes it fall completely out of this binary classification in a new tax system being devised as we speak.

            Tax terminology lesson 101: https://www.gov.uk/government/public...diture-toolkit

            Comment


              #7
              Originally posted by AndrewDod View Post

              Not sure you understand the terminology. -- "costs incurred as a consequence of trading" - what exactly does that mean in this context that makes it fall completely out of this binary classification in a new tax system being devised as we speak.

              Tax terminology lesson 101: https://www.gov.uk/government/public...diture-toolkit
              Dont worry-I do .Sorry you find my assertions poorly expressed. To oversimplify could appear patronising.

              Comment


                #8
                Originally posted by gnvqsos View Post

                Dont worry-I do .Sorry you find my assertions poorly expressed. To oversimplify could appear patronising.
                Sure let's oversimply, because it is actually relevant to selecting tenants

                a) We are talking about personal finances, not business finances
                b) The only real pure type of savings is cash under the mattress
                c) In a related thread you are trying to create a totally artificial distinction between "savings" in personal finance (meaning - to you - cash held in a savings account at Nationwide Building Society) and investments.
                - But the cash at Nationwide is just a low risk investment. You are earning a premium by lending them money to use to give to other people to buy houses. That's an investment. It is low risk - you are unlikely to lose your capital (but could do if interest rates become negative, the bank goes bust, or a government levies a wealth tax).
                - That is not fundamentally different to buying bonds (lending cash to the government)
                - Or lending cash to General Dynamics to make and tell Tomahawk missiles.

                Having stated initially that pensions are savings (they are not in the same sense of providing security if sued)
                you now wish to state that somehow different sorts of investments are savings, and others are not.

                You then congratulate jpkeates elsewhere on not making value judgements (not sure why you seem to want to create a bizarre schism between me and jp - I respect jp although we don't always agree, but he is sensible and considered) - but seem to miss the fundamental point that it is all about value judgments. I happen to place a different value on a small pension to that placed by jp (and I think he is wrong) - but it is still a value judgment. The whole point of this and other threads thread is to discuss what value judgments people place on different things, and what EVIDENCE there is for making such decisions. Judgments are not made on the basis of anything other than perceived value.

                Making patronising comments does not advance anything, and does not make you look very wise either.

                Comment


                  #9
                  Originally posted by ss112233
                  yup! for income tax. its very complex, and quite a gray area imo.
                  I'm concerned that you seem to think this is a grey area.
                  Because it doesn't look like it from the details you have given us, and I'm concerned there's something we haven't understood - Gordon999 's answer #4 looks spot on to me.

                  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


                    #10
                    Originally posted by AndrewDod View Post
                    not sure why you seem to want to create a bizarre schism between me and jp
                    I don't see that.
                    But thanks for your sensible approach and decent words.

                    We can disagree and still help people.
                    God knows I've been wrong often enough, and several times more than one thing has turned out to be true at the same time!

                    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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