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