Rental Property Income - Residential
Whenever a Landlord lets a property in the UK in their own personal name, the Landlord would have to declare the rental income on their Personal Tax Return. If there is a joint ownership between 2 or more people then the rental income and expense have to be apportioned accordingly to then combine with the other sources of income to determine the tax rates and the tax due.
Landlords have the option to either claim £1,000 each as an expense known as the "Trading Allowance", which in this case would not require any supporting documents in order to claim or the actual expenses incurred for managing and letting the property can be claimed where supporting documents will need to be kept.
There are other points to also note
Mortgage relief is now restricted to either the lower of 20% on the actual rental profit or the mortgage interest paid in the tax year.
If there are rental losses these can be disclosed in the Tax Return and can be offset against future rental profit. Please note the rental losses can not be offset against the other source of income to reduce the tax bill.
Rental profit regardless of how high it is never subject to Class 2 and Class 4 National Insurance like Self-Employed or Partnership
If you require further assistance, guidance or require a Self-Assessment Tax Return to be completed for Rental Properties and other sources of income.
Please feel free to reach out for a free initial consultation
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