Property income Flashcards

1
Q

Property allowance

A

£1000
When used, no relief is available for allowable expenditure or finance costs

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2
Q

Cash basis

A

Used when property receipts < £150,000
Rental receipts
- allowable expenditure paid

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3
Q

Allowable expenses

A

Legal, professional and administrative costs
Interest paid
Taxes paid by the landlord
Ancillary services provided by the landlord
Property insurance
Replacement of furniture and furnishings
Repairs and maintenance
Fixed rate reductions for motor vehicles used in the property business

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4
Q

Accruals basis

A

Used when property receipts > £150,000
Rent receivable
- allowable expenditure payable

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5
Q

Capital allowances

A

Only available on the cost of plant and machinery used for the repair or maintenance of the property

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6
Q

Replacement relief for domestic items

A

Landlord can treat the cost of replacing domestic items as an allowable expense
Only the cost of a replacement is allowed
Amount of deduction = replacement cost - proceeds from sale of old item + cost of disposal of old item

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7
Q

Finance cost relief is given as a tax reducer of 20% of the lower of…

A

Finance costs for the year + any brought forward
Property income for the year
Adjusted total income

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8
Q

Finance cost carried forward

A

Finance costs - property income 5

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9
Q

Property losses

A

If a loss arises, there is no taxable property income in that tax year
The loss is carried forward and set against the first available future property income

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10
Q

Rent a room relief when rental income <=£7,500

A

Income and expenses arising in relation to the letting are ignored for income tax when rental income <=£7,500
When rental income > £7,500, election can be made to set allowable expenditure at £7,500

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11
Q

Rent a room relief when rental income > £7,500

A

Normal property income rules usually apply
Alternatively the taxpayer can elect to be assessed under the rent a room rules on the gross rents in excess of the rent a room limit of £7,500

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12
Q

Rent a room relief where two or more people share a home

A

Always £3,750 regardless if there are more than two co-owners

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