Dont pay tax on rental property
May 27th, 2008 | By admin | Category: financePaying tax on your buy to let property is always a sore talking point. It seems the HM Revenue and customs are now clamping down on those who are avoiding paying tax on the income they receive from renting out property.
Apparently the HMRC will be employing stealth tactics such as checking with Letting agents and reviewing stamp duty charges to catch offenders. However, it seems there are a number of ways in which landlords can reduce the amount of tax they have to pay. One way is to deduct a number of expenses for managing and maintaining the property.
Landlords can take away the amount of money they pay in interest on their mortgage; this does not cover the money that actually pays off the loan as with a repayment mortgage. It is also possible to claim for maintenance repairs, so if a landlord repairs the roof on their property this is classed as running expenses which can be claimed for. However, if a roof extension is constructed this will be classed as a capital cost this is because an improvement to the property from which it is possible to gain financially.
Another tip on how landlords can reduce the amount of income tax they pay on buy-to -let is by claiming for legal and professional services received by solicitors, insurance, ground rent, service charges and even things like annual gas safety checks. Landlords can also claim council tax and bills paid for tenants including at times when the property is empty. Landlords can also claim back 10% of the rent each year against renewing furniture and fittings. One tip on this is that it is easier to claim under the “wear and tear allowance” rather than claiming for individual items.
If you would like any further details or further information you can use the below links.
HM Revenue & Customs www.hmrc.gov.uk
0845 9000 0444 (helpline), 0845 900 0404
National Landlords Association www.landlords.org.uk
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