Allowable expenses

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  • CarefullyDone
    Thanks for the reply! I had not considered that Sky would have an issue with this! I am not living in the house, so any items in the house will be for the sharers only.
    So if I have a shared house setup, I should check with Sky (or Virgin!) to see if it is okay to do so in a shared house.

    The things that I haven't thought of! I can see this is going to be a steep curve

    Leave a comment:

  • jpkeates
    I meant you can only claim the item as an expense if it's included in the service the tenant's receive in return for rent (you can't just install sky for yourself and claim the cost back).

    You should definitely describe on the tenancy agreement what is included, to what level and what isn't.

    And you should definitely be careful what licence you buy from Sky, I'm surprised they allow someone to re-sell their broadband package.

    Leave a comment:

  • CarefullyDone
    Ah yes.. Broadband is part of the Sky package.
    Can I ask what you mean by "part of the rental package"? I am renting out rooms. Should I define on the tenancy agreement?

    The rooms are fully furnished, as are the communal areas. This includes oven, microwave, hob, dishwasher, washing machine, tumble dryer, television.

    Leave a comment:

  • jpkeates
    Mortgage - interest only (relief being limited to 20% over four years to 2021) includes surveys and set up fees.
    Drain Insurance - yes
    House Insurance - yes (if it's part of the rental package)
    Gas / Electric - yes (if it's part of the rental package)
    Sky - yes (if it's part of the rental package) - and careful about which licence
    Water - yes (if it's part of the rental package)
    TV Licence - yes (if it's part of the rental package)
    Council Tax - yes (if it's part of the rental package)
    Window cleaner - yes
    Cleaner - yes

    travel - PPM allowance is easiest.
    Stationary - for the property business only
    white goods and furnishings - if renting fully furnished, currently there's a 10% allowance being replaced with actual costs being allowable

    You haven't mentioned Broadband / Wi/Fi

    Leave a comment:

  • JakubL
    I would also include:

    - Advertising costs
    - Costs related to the arrangement of the mortgage, such as valuation/booking fees (as it is arranement of finance for a business)

    Re the second point -

    Given the above I would suggest paying the arrangement fees rather than adding them to the mortgage balance if you are given this option.

    Leave a comment:

  • CarefullyDone
    started a topic Allowable expenses

    Allowable expenses

    As a follow up from my previous post, I am trying to budget and establish my likely income (or loss!).
    As this will be my first HMO, I'd appreciate some adviceon allowable expenses, to offset against remtal income.

    I have figured out I will have these bills to pay:

    Drain Insurance
    House Insurance
    Gas / Electric
    TV Licence
    Council Tax
    Window cleaner

    Are these allowable?
    Is there anything else that I ought to consider? Travel.. stationary... replacement of white goods / furniture etc?


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  • Reply to SDLT and first time buyers
    by DoricPixie
    How old are these children if they have yet to go to university?...
    04-07-2022, 22:50 PM
  • SDLT and first time buyers
    by mpppen
    Hello again.

    Just wondering if someone can advise.

    If I sell a BTL to my children who do not own their own property, I understand that they'll get the stamp duty relief.... two questions then.

    If they're buying the £350,000 jointly, does the relief count for...
    03-07-2022, 21:52 PM
  • Reply to SDLT and first time buyers
    by jpkeates
    If the buyers are going to rent the property while they go to university, it may meet the criteria for Stamp Duty Relief but it may not.
    It would be unusual for siblings leaving university to be able to commit to cohabit in a particular place when they graduate.

    There's obviously...
    04-07-2022, 15:14 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    Apart from anything else, if you are selling the property to the kids, you are getting cash and they have a 100% mortgage - and then they are not actually paying a mortgage on 100% of 350K you will be paying it -- it is not a classic GROB, but risks falling foul of GROB rules - so when you die, even...
    04-07-2022, 14:45 PM
  • Reply to SDLT and first time buyers
    by mpppen

    Yes, the lender is happy to lend them 100% the purchase price so not gifting on our side. In essence, it's just removing it from our name into theirs as he is also our lender.

    It's unusual I appreciate but it's a private commercial lender - if that makes sense. His...
    04-07-2022, 13:55 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    A few other comments:

    Depending where you are HMRC is not going to believe "no increase in value over past two years". An estate agent assessment may not be worth much at all. If challenged and HMRC do their own assessment you may be paying tax on a 20% uplift of 350K = quite...
    04-07-2022, 13:45 PM
  • Reply to SDLT and first time buyers
    by mpppen
    Thanks both.

    The intent is for them to live there but they may want to rent it out while they go off to university. That's where I'm struggling as to whether the Stamp Duty relief applies or not.

    CGT wouldn't apply as the property hasn't increased in value significantly since...
    04-07-2022, 13:11 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    Capital gains tax?
    Who assessed market value?
    Are they actually paying for this?
    04-07-2022, 08:35 AM
  • Are letting agent fees(2 year lease,change of tenant) considered allowable expenses
    by ss112233
    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...
    03-07-2022, 13:26 PM
  • Reply to Are letting agent fees(2 year lease,change of tenant) considered allowable expenses
    by AndrewDod
    Absolutely northing at all to do with capital expenditure
    04-07-2022, 08:31 AM