Property Allowance Query

Snowdrop08

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

anselld

You can use the £1000.

Dazed_and_C0nfused

Snowdrop08 said:

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

Don't forget claiming the Property Allowance in favour of actual expenses (£1,000 against £800 in your example) can have other impacts.

Specifically around the ability to claim a tax reducer in relation to finance costs.

Bookworm225

Dazed_and_C0nfused said:

Snowdrop08 said:

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

Don't forget claiming the Property Allowance in favour of actual expenses (£1,000 against £800 in your example) can have other impacts.

Specifically around the ability to claim a tax reducer in relation to finance costs.

do you have a link?

OP has gross income which guarantees they will be "in profit", therefore, they will have a net taxable profit whether they claim 800 or 1,000. As such the tax due will be available for the finance cost tax reducer.

claiming 1,000 rather than actual is a "no brainer" in their case

whilst HMRC admin responses can, at times, be utterly wrong, in this case they are not: 
Rental Income ( Property Allowance+ Carry Forward Finance Costs ???) - Community Forum - GOV.UK

Dazed_and_C0nfused

Bookworm225 said:

Dazed_and_C0nfused said:

Snowdrop08 said:

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

Don't forget claiming the Property Allowance in favour of actual expenses (£1,000 against £800 in your example) can have other impacts.

Specifically around the ability to claim a tax reducer in relation to finance costs.

do you have a link?

OP has gross income which guarantees they will be "in profit", therefore, they will have a net taxable profit whether they claim 800 or 1,000. As such the finance costs will be available for the tax reducer.
claiming 1,000 rather than actual is a "no brainer" in their case

whilst HMRC admin responses can, at times, be utterly wrong, in this case they are not: 
Rental Income ( Property Allowance+ Carry Forward Finance Costs ???) - Community Forum - GOV.UK

Maybe I've misunderstood this?

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4460

Bookworm225

Dazed_and_C0nfused said:

Bookworm225 said:

Dazed_and_C0nfused said:

Snowdrop08 said:

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

Don't forget claiming the Property Allowance in favour of actual expenses (£1,000 against £800 in your example) can have other impacts.

Specifically around the ability to claim a tax reducer in relation to finance costs.

do you have a link?

OP has gross income which guarantees they will be "in profit", therefore, they will have a net taxable profit whether they claim 800 or 1,000. As such the finance costs will be available for the tax reducer.
claiming 1,000 rather than actual is a "no brainer" in their case

whilst HMRC admin responses can, at times, be utterly wrong, in this case they are not: 
Rental Income ( Property Allowance+ Carry Forward Finance Costs ???) - Community Forum - GOV.UK

Maybe I've misunderstood this?

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4460

you have not misunderstood, but in the context of OP's 10k of gross income and minimal costs it does not affect them 

Snowdrop08

Thank you. 

The property is jointly owned. 

Can we also claim the Self-Employed Allowance for income (just) over £1000 on a separate business?

sheramber

Bookworm225 said:

Dazed_and_C0nfused said:

Bookworm225 said:

Dazed_and_C0nfused said:

Snowdrop08 said:

Can anyone help me I wonder?

I have gross income from BTL of, for example, £10000.  Costs/expenses £800. 

Do I claim the full £1000 Property Allowance against the gross rental income or can I only use the £800?

Any answers appreciated!

Don't forget claiming the Property Allowance in favour of actual expenses (£1,000 against £800 in your example) can have other impacts.

Specifically around the ability to claim a tax reducer in relation to finance costs.

do you have a link?

OP has gross income which guarantees they will be "in profit", therefore, they will have a net taxable profit whether they claim 800 or 1,000. As such the finance costs will be available for the tax reducer.
claiming 1,000 rather than actual is a "no brainer" in their case

whilst HMRC admin responses can, at times, be utterly wrong, in this case they are not: 
Rental Income ( Property Allowance+ Carry Forward Finance Costs ???) - Community Forum - GOV.UK

Maybe I've misunderstood this?

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4460

you have not misunderstood, but in the context of OP's 10k of gross income and minimal costs it does not affect them 

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4483

Stephanie elects to use the property allowance for partial relief. All her relevant property income for the tax year is from the one property business (her UK property business).

Stephanie computes partial relief as follows:

Step 1 – Calculate Total Receipts of the relevant property business:

The total receipts of the relevant property business is £1,200.

Step 2 – Subtract the Deductible Amount from Receipts:

The £1,000 allowance is subtracted from the total receipts for her property business. This leaves £200 (£1,200 - £1,000) of taxable profits for Stephanie’s property business.

The legal fees of £150 are not brought into account because you cannot claim both the property allowance and expenses.

Snowdrop08

Thank you. I understand it now. 

I should have called it the Trading Allowance in the second question. 

As I understand it - each of us can claim the Property Allowance of £1000. 

                             - I can also use the Trading Allowance £1000 for one SE business but cannot claim any expenses for another SE business.