What can I claim against rental income

  • Filter
  • Time
  • Show
Clear All
new posts

    What can I claim against rental income

    I am in the process of renovating a large flat which I have just bought.

    1. I have a private mortgage until the renovations are complete when I will get a buy to let mortgage. I am assuming I can claim the interest payments on both these mortgages against future rental income - is this correct.

    2. Although the carpets were good quality they were very old and worn and I have replaced them all. Can I claim all this on my first tax return that includes the property.

    3. The hot water in the flat was provided by two ascots serving the kitchen and bathroom and the heating was gas or electric fires. I have replaced all this with a central heating system for hot water and heating. What % of the central heating installation could I get away with claiming against future rental income.

    I was planning to claim these amounts on my first tax return then go to the 10% of rental income on subsequent returns - is this the best approach.

    Any help would be appreciated.

    You can claim interest on the private mortgage as well as the replacement mprtgage. You maty need to deduct tax at 20% from the private interest and pay over only the net interest.

    Carpets is furnishings and could be claimed as 10% wear & tear or renewals basis on a subsequent change but not both.

    Central heating installation is always improvement and claimed when calculating capital gains tax on a disposal.

    Generally, all expenses before commencement of lettings are additional costs of buying the property and putting it in a fit state to let before letting, and therefore not allowable against rental income. It is only the ongoing expenses incurred as a result of letting which are allowed as expenses against rental income. Improvements are always disallowed. Sometimes there is a fine dividing line between expenses and improvements.

    Trust this helps.
    Private advice is available for a fee by sending a private message.


      claim for central heating

      Many thanks for your reply.

      As I expect to move into the property at some time in the future and live in it as my sole residence I don't expect to pay CGT.

      If say the repalcement costs of the old ascots and electric fires was estimated at say £1000 could I claim this £1000 of part of the central heating bill.


        Even if you move into the property in the future, you may still be liable to CGT based on the period whilst the property was not your only or main residence.

        I don't understand your last paragraph. Basically, if the expenditure is an improvement, you cannot claim any part of it against your rental income.
        Private advice is available for a fee by sending a private message.


        Latest Activity


        • inherited house - best to sell or rent
          by Wobble1
          Hi all,

          My father sadly passed away in February, I already owned half of his house as tenants in common via my mothers will (passed several years before), although I didn't live there with him. Have my own house nearby. I am sole beneficiary of his will, and as well as everything else,...
          17-06-2021, 20:32 PM
        • Need CGT help or do i ned an accountant
          by Sara2
          Mother died in 2007 left house to me and my 2 sibs it was family home and i lived in it until 1985 when i had my own house. My brother also lived in house at point mum died and he remained there until 2010 when not being able to sell the property i purchased whole of property by buying brother and...
          13-06-2021, 11:53 AM
        • Reply to Need CGT help or do i ned an accountant
          by Sara2
          I fail to see how i can notify hmrc that rental was terminated in 2019 whilt non paying tenant remained in the property until May 21
          17-06-2021, 19:29 PM
        • Reply to Need CGT help or do i ned an accountant
          by Gordon999
          If you do not inform the Tax Office and just move back to live in the BTL property, the "rental business with tax losses" , can remain in existence for three years.


          But the property owner can notify the Tax Office...
          17-06-2021, 12:28 PM
        • Reply to IHT, CGT and Income tax avoidance
          by jpkeates
          But there's £750,000 mortgage lending to pay off when you die, so the "giving away" is more like a loan.

          I'm not expecting anyone to pay 1p more tax than they should, but I find it's sometimes interesting to replace "the taxman" and "HMRC" with "we/us"...
          17-06-2021, 09:38 AM
        • IHT, CGT and Income tax avoidance
          by clairol
          So I’ve been listening to some property investment seminars where the suggestion is to buy ‘good’ properties, regularly put the rent up and never sell them.
          The advice is to keep them forever so you do not pay CGT; re-finance regularly and either enjoy the money or re-invest it; pay minimal...
          16-06-2021, 16:40 PM
        • Reply to IHT, CGT and Income tax avoidance
          by Section20z
          Yes but people who do maths in your example could give the £750,000 away before death so beneficiaries get £400,000 extra and tax man loses ....
          17-06-2021, 09:01 AM
        • Reply to IHT, CGT and Income tax avoidance
          by jpkeates
          It might be popular, but only to people who can't do maths.

          It's only a tax effective policy in the same way that having no money when you die means you don't pay that much inheritance tax.

          Ignoring the reliefs and personal thresholds for simplicity, if you die with a portfolio...
          17-06-2021, 08:10 AM
        • Reply to Need CGT help or do i ned an accountant
          by jpkeates
          Surely the business continued (the rent was still owed, even if not paid) and the business continued until the disposal of the property (assuming it was the only property in the business).

          Your interpretation is more appealing if it can be justified....
          17-06-2021, 07:54 AM
        • Reply to Need CGT help or do i ned an accountant
          by jpkeates
          Whoever gave you that advice doesn't understand how CGT works.
          You straight line the increase between purchase and disposal and you can deduct any time the property was your main residence (plus some additional months) as that period's gain is tax free.

          Any valuation when you start...
          17-06-2021, 07:52 AM