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PTAX Personal Taxation

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Presentation on theme: "PTAX Personal Taxation"— Presentation transcript:

1 PTAX Personal Taxation
Income From Property (Rental Income)

2 Objectives To be able to: Identify allowable expenses
Calculate taxable property income Treat property losses correctly Make suitable elections for Rent-a-Room relief Calculate taxable income from furnished holiday lets Prepare tax return supplements for Employment Income Property Income

3 Income & Expense Receipts or accruals basis?

4 Expenses The general rules for expenditure to be allowable:
Revenue, not capital. ie. Not improvements (central heating) Wholly and exclusively for purpose of lettings

5 Allowable Expenses Irrecoverable rent (NOT deducted from income)
Expenditure before a property is rented out But not renovation Expenditure in void periods

6 Wear & Tear Allowance What is the Wear and Tear allowance?

7 Non-allowable Expense
DEPRECIATION

8 Property loss Against what income can you claim property losses?

9 Rent a Room and Other Rules

10 Rent a Room Relief £4,250 /year Example
If you rent out part of your own home for £5,000 a year, taxable income is: £5,000 less expenses OR £5,000 less £4,250 Rent a Room Relief

11 Rent a Room Relief: Question
If you rent out part of your own home for £6,000 a year, incurring expenses of £3,200, what is your taxable income?

12 Holiday Lets What is different about the rules for Holiday Lets?

13 Holiday Lets View to making a profit Max 31 continuous days per tenant
Actually let for 105 days Available for twice this (210 days)

14 Question What records might you keep relating to property income?

15 HOMEWORK Tutorial book questions 2.4 (part 1), 2.1, 2.1, 2.3, 2.5, 2.6, 2.7 Read chapter 2


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