This month we are focusing on: Inheritance and Property Tax
And this week are looking at: Tax on Property – Rental
If you decide to purchase a property for rental – you will pay Capital Gains Tax on the eventual profit from sale – but whilst you are renting the property you will have to pay tax on the profits from the rental income.
You can reduce this profit by deducting allowance expenses such as
• water rates, council tax, gas and electricity
• contents insurance
• costs of services, including the wages of gardeners and cleaners (as part of the rental agreement)
• letting agents’ fees
• legal fees for lets of a year or less, or for renewing a lease of less than 50 years
• accountant’s fees
• rents, ground rents and service charges
• direct costs such as phone calls, stationery and advertising for new tenants
• Certain Travel Expenses
NB Reliefs for finance charges, such as mortgage interest, is being eroded to zero
The tax rate is calculated based on your total income from all sources whether this is employment, self-employment, dividends and your rental income.
If you know anyone that needs help and advice with tax return property rental supplements please ask them to contact Avanti, (08000) 388 799