How to reduce tax as much possible on rental income abroad?

DRS1

But I suppose installing two new ACs is for sure a valid expense?

Sounds like it could be an improvement. Fixing broken AC would be a repair and maybe replacing the broken AC with new AC would be a repair but putting in completely new AC when there wasn't any before would be an improvement. That is the sort of question though where an accountant could be a good use of money. Expenses in the first year are trickier than when you have been going for a while.

One thing I did not know until recently was that where your gross rent is under £90k you can lump all your expenses into a consolidated expenses category (I think it is the other expenses box) . That can save having to decide which box to put something in.

JacobEdgar

https://forums.moneysavingexpert.com/discussion/comment/81899212#Comment_81899212

silvercar, thanks. Also from what I gather is that I will have to start paying Class 2 contributions I guess, as I will be earning over £12,570.According to a calculator I found, if I earn 23000, it would be 625 GBP, as it would be calculating this rental income right? (the calc doesnt show a option for foreign income).

https://forums.moneysavingexpert.com/discussion/comment/81899263#Comment_81899263

Mmmm, it seems I will have to very carefully examine everything. Indeed if I can dump all expenses into one category I'll do that.

DRS1

You don't pay NICs on rental income - that is the excuse they used for putting the income tax rate on rental income up by 2% in the last budget.

On the expenses I should say the consolidated expense thing is only for allowable expenses! I don't know how they police it but if the expenses are a very big proportion of the rent they may ask questions. As I say where you are uncertain it would help to ask an accountant (at least for the first tax return).

JacobEdgar

https://forums.moneysavingexpert.com/discussion/comment/81900829#Comment_81900829

DRS1 Ah, that's good to hear. At least a cost less to worry about. Yes, of course, only allowable expenses. Not improvements. I'll start keeping receipts of all the costs, and check thoroughly before doing the assessment. Will try to avoid if I can an accountant, although it takes me long to double check every small thing.