Landlord’s quick guide to what costs can be deducted from rental income

The end of another tax year and as landlords think about their tax return they may be wondering what costs can be deducted from rental income. Costs that can be deducted are as follows:

* Financing costs

* Repairs and maintenance (but not property improvements)

* Heating and lighting (where paid by the landlord)

* Insurance

* Letting agency fees

* Advertising for tenants

* Accountancy fees

* Professional and legal fees in connection with tenancies (but not costs related to the sale or purchase of property or planning applications)

* Ground rents and service charges

* Bad debts

* Capital allowances on office or other equipment used in the course of running a property business

* Administrative expenses including wages and also the cost of phone calls, stationery, subsistence, travel and an appropriate proportion of household expenses if you run your property business from a room in your home (HMRC has detailed rules on what household expenses are allowed and what proportion is calculated.

More information can be found via these links:

• Tax on rent from residential property lettings;
• Expenses and allowances on income from property

or contact Her Majesty’s Custom and Revenue (HMRC) or seek advice from an accountant or specialist tax adviser.

Jungle Property now provides all our client landlords with an annual financial statement to help with their tax assessment.