Rental Property Accounting

If you own more than one property in the UK, you can opt into nominate which property should be treated as your main residence for tax purposes. When you opt in for such an election there are different tax implications, based on the qualifying conditions. But you should note that three are strict time limits for making this election, which has to be filed with HMRC, so it is important that advice is sought as soon as possible.

If you rent out property you will pay income tax on the difference between the rents you have charged in a tax year, minus any allowable expenses and charges.

Following are the allowable expenses

  • Repairs – Your expenses to maintain your property in its existing condition can be claimed. However if you improve the specification of the property, say replace kitchen units with a more expensive design, then HMRC may try and argue that the expenditure is an improvement but not maintenance. IF HMRC goes down on that route then the cost of improving your property can be claimed against any capital gains tax when you sell the property.
  • Mortgage or loan interest – You can claim for all the interest charged on the loan relating to the purchase of the property, including the incidental cost of securing the finance. However, you cannot claim for the capital element of the loan repayments.
  • Furniture replacement – If you let a residential property fully furnished, you can make a deduction for the depreciation and replacement of furniture.

If you need further advice on rental accounting, contact KVS Accountants based in Fulham on 020 7731 6131. We are experienced accountants and tax consultants specialised in rental property accounting. We are rental accountants in Wandsworth, Battersea, Southfields, Roehampton, Earlsfield, Wimbledon, Chiswick and East Sheen.


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