When you own a property which is let out to tenants, this is known as a buy to let. If you receive income from a buy to let, you need to register for self assessment, which will mean that you will have to complete tax returns each year.
Your net property income is assessed for income tax, which means that you take the income you receive from your tenant and deduct allowable expenditure. Typically, the allowable expenditure includes the following:
- Letting agents fees
- Mortgage interest
- Property insurance
- Property maintenance, such as the gas safety certificate or decoration
- If the property is furnished, you can also deduct 10% of the income
If your property makes a loss, the only thing you can do is carry it forward to offset generic cialis for sale future property profits. It cannot be offset against other income, or carried back to offset against property profits in earlier years.
If the property is jointly owned, then any profits or loss are jointly split. The only way that profits could be assessed under 1 name is if the deeds are changed.
When the property is disposed of, any gains would be subject to capital gains tax, which is chargeable after the annual exemption (currently £10,900). NB if the property is jointly owned, then each individual will receive an annual exemption.
These are the more common issues which affect buy to lets. However, if you have more specific issues or want help, please do not hesitate to contact us.