Property Income

Question 1

is property income included in trading profit?

Answer 1

no, taxed elsewhere

Question 2

how is property income taxed?

Answer 2

if property income <£150k, it’s taxed on the cash basis

Question 3

cash basis?

Answer 3

this means property income received is subject to tax, not accruals

Question 4

is a replacement deductible for property income?

Answer 4

yes

Question 5

is an enhancement a deductible expense for property income?

Answer 5

no

Question 6

what are the types of mortgage payments?

Answer 6

either capital or interest payments

Question 7

are mortgage interest payments deductible?

Answer 7

yes, it’s a tax reducer

interest payment * 20% on residential property is deducted from tax liability

20% regardless of tax band

Question 8

tax reducers?

Answer 8

refers to things that are deducted from one’s tax liability

include:
- finance costs on residential property
- marriage allowance

always *20%

Question 9

tax increasers?

Answer 9

refers to things that are added to one’s tax liability

include:
- child benefit charge (1% of CB for every £200 that income >£60k)

Question 10

are mortgage capital payments deductible?

Answer 10

no