Calculating Tax for Property Tax - Can Expenses include Losses at Shares and Joint ..

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    Calculating Tax for Property Tax - Can Expenses include Losses at Shares and Joint ..

    Hello

    I am planning for the first time to Fill Property Income Tax for HMRC Online.

    My situation is straight forward but please help me out if you can.

    I am currently part time employed and earn approx 15000 PA
    My wife is currently unemployed.

    I bought buy to let property on my name and rent it on my name.

    However i invested some money in Shares but made loss.

    I was just wondering can that loss be made against Income Tax or is it against Capital Gain Tax.

    After calculating Rental Income and Expenses my profit is only £2088 pa.

    Am i right thinking that tax i need to pay on that amount is £417.60 or 20 %?

    Also -To save Tax would it make sense to transfer property on both names,mine and my wives when it comes to renting or is too complicated now or costly?

    And when it comes to Expenses -I have made purchase of new bed to replace existing one .If i make claims for tear and wear i assume i can't include that new bed as expense?

    And regarding Expense for stationary i did have some expenses like £30.00 but what if i was to buy laptop what that be allowed?

    Sorry if i ask some "beginners" questions but have had tough year due to family issues...

    Regards!

    Al

    ps.i forgot i read somewhere that if i feel the form before 30 December i can pay tax in installments if PAYE used - does that make sense?

    #2
    if you read through the forum for a couple of hours following the links to similar threads at the bottom of each page then you will get all your answers, BUT importantly you will have actually learned in the process which is of greater benefit to you in the longer term.

    I would also suggest investing in two books, how to reduce property taxes - by tax café and david lawrensons latest book, on property investing (sorry cant remember the title) - I started a couple of years ago and bought everything I could, but soon realised most books were next to useless compared to those two. and yes, you can claim against their purchase !!

    I would also suggest engaging an accountant to guide you through the tax issues for at least the first year, again, look to learn and understand and not just be told what to do without knowing why!

    Comment


      #3
      Your investment in shares is capital and you need to record the loss to claim back later against a gain.

      You pay tax against the income (and offset certain costs against that income).
      If you are a basic rate tax payer your calculation looks reasonable - however, not all expenses are allowable.

      Beds are furnishings and may not be allowable costs.
      If you rent furnished there is a 10% annual wear and tear allowance that is (usually) more suitable.

      General business expenses are allowed if they are entirely and exclusively for the business.
      So a laptop you only use for the business is allowable, one you use personally as well, is not claimable.
      Depending on your confidence, if you use it for a proportion of the time for work you could claim for that portion.
      But you might be asked to justify that (and, unless your business is demanding/ your personal use light, that can be difficult).

      You can claim mileage costs for journeys that are entirely related to your business.

      You might find an accountant s useful service - their fees are also allowable.
      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


        #4
        In certain circumstances, capital losses can be set against income - provided they arise from a subscription(s) in an unquoted trading company.

        Comment


          #5
          Originally posted by jpkeates View Post
          So a laptop you only use for the business is allowable, one you use personally as well, is not claimable.
          Depending on your confidence, if you use it for a proportion of the time for work you could claim for that portion.
          But moreover, in addition to that, the cost of a laptop would not be simply deductible against income tax, either; it would be a calculation based on the anticipated lifetime of the laptop and its annual depreciation, never mind the proportion of business/personal use.

          Comment


            #6
            That's essentially true - however there comes a point where costs are just being manipulated beyond common sense.
            How many people spread repair and maintenance costs over an anticipated lifetime?

            There's a common sense approach that's needed to keep things manageable.
            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


              #7
              Common sense & HMRC rules?? You'll be lucky...
              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

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