Property Income Allowance

Teapot55

Intending to claim this £1000 per annum allowance against tax for last year but a little concerned that if I do it this time I won't be able to claim actual expenses offset against rental income in the future.

By way of illustration - I spent relatively little on the property last year - only the essentials and it does not amount to as much as £1000. However, if in future years I decide, for instance, hypothetically, to replace the boiler, replace a cracked washbasin, replace leaking gutters, have roof repairs all in the one tax year and the bills came to well past £1000, are the HMRC going to say "Oh no, you've opted to go for the £1000 allowance now, you can't go back!"

I suppose none of us has a crystal ball - but if anyone knows anything would be grateful to know

[Deleted User]

You have the option each year to choose whichever. 

Teapot55

[Deleted User] said:

You have the option each year to choose whichever. 

Thanks. I hope you’re right. 

Jeremy535897

Teapot55 said:

[Deleted User] said:

You have the option each year to choose whichever. 

Thanks. I hope you’re right. 

Ferro is correct. You choose year by year.

silvercar

Do you have a mortgage on the property? Even though the interest can now only go in the separate finance box on your tax return, my understanding is that the interest can’t be included in your tax calculation if you go for the £1,000 allowance instead of claiming the actual expenses.

Teapot55

Thanks for that. Fortunately there is no longer a mortgage on the property. 

LimeStar

Out of interest on this subject, am I right in assuming that this is not a per property allowance but a per person allowance?  So 1 person owning 2 properties where one has expenses that exceed the £1k allowance and the other does not cannot claim the allowance against the property with the sub £1k expenses and claim the other expenses at value? Apols if this is classed as hijacking - just the thread piqued my interest

Dazed_and_C0nfused

LimeStar said:

Out of interest on this subject, am I right in assuming that this is not a per property allowance but a per person allowance?  So 1 person owning 2 properties where one has expenses that exceed the £1k allowance and the other does not cannot claim the allowance against the property with the sub £1k expenses and claim the other expenses at value? Apols if this is classed as hijacking - just the thread piqued my interest

Correct.  It is per person, not per property. 

Excepting first and final years of renting I suspect someone with two or more let properties would be pleasantly surprised if they could benefit from the Property Allowance!

Teapot55

LimeStar said:

Out of interest on this subject, am I right in assuming that this is not a per property allowance but a per person allowance?  So 1 person owning 2 properties where one has expenses that exceed the £1k allowance and the other does not cannot claim the allowance against the property with the sub £1k expenses and claim the other expenses at value? Apols if this is classed as hijacking - just the thread piqued my interest

Not at all: your question is on topic. 

Bookworm105

silvercar said:

Do you have a mortgage on the property? Even though the interest can now only go in the separate finance box on your tax return, my understanding is that the interest can’t be included in your tax calculation if you go for the £1,000 allowance instead of claiming the actual expenses.

sorry but for avoidance of doubt, from 6 April 2020 interest can never go in actual expenses
interest is always a tax credit against the tax payable, never a deduction (cost) when working out the taxable profit upon which the tax is then calculated.

Jeremy535897

Bookworm105 said:

silvercar said:

Do you have a mortgage on the property? Even though the interest can now only go in the separate finance box on your tax return, my understanding is that the interest can’t be included in your tax calculation if you go for the £1,000 allowance instead of claiming the actual expenses.

sorry but for avoidance of doubt, from 6 April 2020 interest can never go in actual expenses
interest is always a tax credit against the tax payable, never a deduction (cost) when working out the taxable profit upon which the tax is then calculated.

The point being made is that you cannot claim the property allowance and the credit for residential finance costs in the same year, not that residential finance costs can be included in expenses:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4460