Buy to Let Tax/What costs can be offset against tax

dezguffry

Hi, I'm new to the site, so please be gentle.

I am in the process of filling in my self assessment tax return for 06-07. I want to double check I am claiming for all the tax relief I am entitled to and more importantly not claiming for anything that is not allowable. I would be grateful if anyone can suggest any websites or threads within this site that may help me through this mine field. Otherwise its am expensive trip to an accountant. I own two buy to let properties, one which was purchased in the 06-07 tax year. I am in full time employment.

Which of the below can be offset as costs against income. And have I missed anything.

1. Mortgage payments (interest only mortgage)
2. Legal cost relating to purchase of the property
3. New carpets and flooring for the property
4. Trades men costs
5. Receipts for materials and fixtures purchased for the property
6. Arrangement and other mortgage related fees
7. Estate agent costs for finding/ managing tenant
8. Petrol receipt for travel related to property
9. Cost for re-mortgage on other properties to raise capital for purchase of buy to let.
10. Mortgage payments made in any tenancy void.
11. Any utility bills, service charges, council tax, insurance etc paid by myself relating to buy to let property.

Thanks in advance to anyone who responds.

prudryden

10% of rent for wear and tear per year.
Accountancy fees.
Building/Contents/Liability Insurance.
Postage.
Telecommunications.
Office space in home for running business.
Grass/Hedge trimming.
Any professional memberships for landlords.
Professional Inventory Clerk.
Annual Gas Checks. Electricity checks if deemed necessary.

tucbiscuit

I would also be very grateful for any info on this matter, especially regarding reclaiming money on interest only mortgage payments, agents fees and insurance and everything else actually

subjecttocontract

You can't possibly expect to receive all of the information needed to complete your tax return from a chat forum.

You need more than just a list of what others claim as there are lots of factors that affect individual claims.

You need to split expenses into income tax, CGT and capital expenditure.

There are lots of really good books available and the best bit of advice is for you to read some of them or employ an accountant.

I'd recommend: How to Avoid Property Tax by Carl Bayley....costs about £25

clutton_2

i utterly agree with the last poster - but you do only have 9 days to go !!

The inland revenue used ot publish a book let "Taxation of Rents" - believe it is now only an online publicaition - very useful.

if you are claiming an agents fees, why are you also claiming your own journeys to the property ?

i think that purchase costs are only claimable on re-sale - but i leave that ot my accountant.

i believe you can only claim 10% wear and tear on furnished properties

but - this is only a forum - seek proper advice.

at least get a Returns in on time (£100 fine if you dont ) and then get an accountant to renegotiate for you.

subjecttocontract

Heres a summary breakdown of buying selling costs and apportionment between IT & CGT

IT
You can claim the costs (actually paid) that are specifically associated with arranging finance for the purchase of the property.

* Searches (only if required by lender)
* Mortgage application fees
* Redemption fees
* Managing agents fees
* Bank charges/ telegraphic transfers etc
* Land Registry fees
* Valuation/ Survey fees (only if required by lender)
* Fee charged for using an alternative buildings insurer

CGT

* Solicitors fees inc vat
* Stamp Duty
* Valuation/ Survey fees (only if required by purchaser)
* Searches (only if required by purchaser)
* Estate agent fees

IveSeenTheLight

dezguffry wrote: »

Hi, I'm new to the site, so please be gentle.

I am in the process of filling in my self assessment tax return for 06-07. I want to double check I am claiming for all the tax relief I am entitled to and more importantly not claiming for anything that is not allowable. I would be grateful if anyone can suggest any websites or threads within this site that may help me through this mine field. Otherwise its am expensive trip to an accountant. I own two buy to let properties, one which was purchased in the 06-07 tax year. I am in full time employment.

Which of the below can be offset as costs against income. And have I missed anything.

1. Mortgage payments (interest only mortgage)
2. Legal cost relating to purchase of the property
3. New carpets and flooring for the property
4. Trades men costs
5. Receipts for materials and fixtures purchased for the property
6. Arrangement and other mortgage related fees
7. Estate agent costs for finding/ managing tenant
8. Petrol receipt for travel related to property
9. Cost for re-mortgage on other properties to raise capital for purchase of buy to let.
10. Mortgage payments made in any tenancy void.
11. Any utility bills, service charges, council tax, insurance etc paid by myself relating to buy to let property.

Thanks in advance to anyone who responds.

I have recently had a company fill in my tax return for me.
One thing they advised was that we could not claim against the purchase costs of the property

clutton_2

you also cannot claim for capital refurbishment until you sell.

subjecttocontract

IveSeenTheLight wrote: »

I have recently had a company fill in my tax return for me.
One thing they advised was that we could not claim against the purchase costs of the property

Either they have given you WRONG informatuion or you have misunderstood what they have told you


IT
You can claim the costs (actually paid) that are specifically associated with arranging finance for the purchase of the property.

* Searches (only if required by lender)
* Mortgage application fees
* Redemption fees
* Managing agents fees
* Bank charges/ telegraphic transfers etc
* Land Registry fees
* Valuation/ Survey fees (only if required by lender)
* Fee charged for using an alternative buildings insurer

If you have paid ANY of the above costs.....you have paid them because you have finance associated with the property and therefore you CAN claim them against income tax.

BobProperty

dezguffry wrote: »

.....Otherwise its am expensive trip to an accountant.....

More expensive than a late filing fee, late tax charge and interest?

dezguffry wrote: »

Which of the below can be offset as costs against income. And have I missed anything.

1. Mortgage payments (interest only mortgage)
2. Legal cost relating to purchase of the property
3. New carpets and flooring for the property
4. Trades men costs
5. Receipts for materials and fixtures purchased for the property
6. Arrangement and other mortgage related fees
7. Estate agent costs for finding/ managing tenant
8. Petrol receipt for travel related to property
9. Cost for re-mortgage on other properties to raise capital for purchase of buy to let.
10. Mortgage payments made in any tenancy void.
11. Any utility bills, service charges, council tax, insurance etc paid by myself relating to buy to let property.

Thanks in advance to anyone who responds.

3. Don't think you can claim 3. Either you claim replacement costs or 10% of net rent for wear and tear, not both, once you have started renting it. New stuff before you start renting it out doesn't count. You might, and it is a might, get the flooring as a capital improvement to be offset against CGT but those rules are about to change anyway.
4&5. For repairs only not improvements.
2,6&9 Not against income.
8 You might be able to claim mileage but then the HMRC will ask what you paying an agent, tradesmen etc for and expect you to justify it.
11. Probably when it was available for let. If it was while you were "doing it up" it wouldn't be allowed.

alibongo42

If it helps, the book suggested by Subjecttocontract is available on the Tax Cafe website for immediate download (free when buying the hard copy).

Happy last minute form filling. I've not finished mine yet either!