Offsetting rental expenses

Badgersrus

I think I know the answer to this one before I even put it out there, but I reckon I have a point;

I have a couple of Buy To Lets and until recently owned my home outright as well. We planned to move to Spain and sold our main residence to purchased a block of flats. Spain has been delayed and we are now renting. The capital for the purchase of the flats came directly from funds from the sale of my main residence.

I have seen responses to similar question and it would appear one can't claim rent against income, however, is there not an argument that says since the cost of capital raised is a legitimate expense (for example mortgage interest), it would seem reasonable the cost of capital in this case would be the cost of renting the home I now live in. Further, if I was a business and owned an office, moved out and let it, then rented an alternative office, it would be a legitimate expense to offset rent paid against income. It seems a logically sound argument.

Any thoughts?

anselld

Badgersrus wrote: »

I think I know the answer to this one before I even put it out there

Yes, you do.

Badgersrus wrote: »

but I reckon I have a point;

No, you dont.

Badgersrus

Anselld, why do I not have a point? Whilst HMRC may say no, it does not necessarily follow their rules are not arbitrary rather than a reasoned position.

LateStarter

I'm not sure what you're trying to achieve. Even if 100 strangers on an internet forum agree with you, what difference would that make to HMRC?

theartfullodger

The patriot pays his fair taxes gladly & promptly.

Asking this the day after SA retu deadline day begs the question, have you completed your 2016-2017 tax return, please? (Yes, I did, no didn't like the bill).

troffasky

LateStarter wrote: »

I'm not sure what you're trying to achieve.

This is a discussion forum and what the OP would like to achieve is to have a discussion about it. Who knows, it could turn in to a petition and a discussion in parliament.

Comms69

The reason you cant offset your rent against your rental income is quite simple. You needing somewhere to live is not relevant to your business.

LateStarter

troffasky wrote: »

This is a discussion forum and what the OP would like to achieve is to have a discussion about it. Who knows, it could turn in to a petition and a discussion in parliament.

Yes, of course the tax payer should foot the bill for it.

:rotfl:

Badgersrus

LateStarter wrote: »

I'm not sure what you're trying to achieve. Even if 100 strangers on an internet forum agree with you, what difference would that make to HMRC?

I was hoping, against the odds, someone might have come up with a little-known loophole or at least something constructive. For example, someone suggested I turn one of my bedrooms into a massive office and store for supplies, white goods and other equipment and claim a decent portion of the rent and bills against tax. This is something useful as a renter because there is no future CGT issues there would be with a home owner claiming a home office. I do claim a home office, but not a massive one!

theartfullodger wrote: »

The patriot pays his fair taxes gladly & promptly.

Asking this the day after SA retu deadline day begs the question, have you completed your 2016-2017 tax return, please? (Yes, I did, no didn't like the bill).

Only purchased in May 2017, so planning ahead!

Comms69 wrote: »

The reason you cant offset your rent against your rental income is quite simple. You needing somewhere to live is not relevant to your business.

...but, the argument goes.... the state receives tax from the profits of the flats so it seems only fair the source of those funds should be tax deductible, No rental, no flats, no tax!

LateStarter wrote: »

Yes, of course the tax payer should foot the bill for it.

:rotfl:

As it stands I increase the tax take for the state. i pay tax on the flat income. If I could offset my rent it would still advantage the state, since I would be claiming rent paid for one house against income from 8 flats.

Comms69

Badgersrus wrote: »

I was hoping, against the odds, someone might have come up with a little-known loophole or at least something constructive. For example, someone suggested I turn one of my bedrooms into a massive office and store for supplies, white goods and other equipment and claim a decent portion of the rent and bills against tax. This is something useful as a renter because there is no future CGT issues there would be with a home owner claiming a home office. I do claim a home office, but not a massive one!



Only purchased in May 2017, so planning ahead!



...but, the argument goes.... the state receives tax from the profits of the flats so it seems only fair the source of those funds should be tax deductible, No rental, no flats, no tax!




As it stands I increase the tax take for the state. i pay tax on the flat income. If I could offset my rent it would still advantage the state, since I would be claiming rent paid for one house against income from 8 flats.

The business would continue whether you had a home or not. Your living expenses are not related to the business. Otherwise you could argue your food bill should be deductible, as without it you were cease to exist.

Badgersrus

Comms69 wrote: »

The business would continue whether you had a home or not. Your living expenses are not related to the business. Otherwise you could argue your food bill should be deductible, as without it you were cease to exist.

Not sure you got the point - living expenses, vis a vis rent are related to the business of the flats. The business would not exist in my ownership if I had not sold my house and used the cash. Arguably, the state is in a better position since the previous owner was mortgaged to the hilt so I pay more tax than the previous owner as I'm a cash buyer and pay at the higher rate.

That aside, I think we've gone off piste somewhat. There are many cases where living costs are deductible, such as provision of accommodation for a caretaker. Meals can be claimed as a legitimate expense, The rules are often inconsistent and lack logic - for example much of the rules around what attracts VAT and what does not are bonkers. I was putting it out there, partly as a discussion, but perhaps hoping a smart person out there may have an angle. You can bet a pound to a penny if I was a multinational they'd find a way to write it off. So, in the spirit of bending the rules, loopholes and other avoidance schemes, any good ideas anyone? Previous negative posters may not apply, as they add nothing constructive to the discourse,