How to reduce your taxable income on Buy to Lets

A substantial reduction in your tax bill on letting income can be made if you keep records and invoices for the following expenses to claim:-

1) Agents letting fees and expenses
These costs can be found in the agent's statement of account.

2) Ground rent, service charges, council taxes, water rates and light and heat.

3) Insurance
This will include building insurance and where the property is let fully furnished, contents insurance.

4) Repairs
Repairs to property, furniture and equipment are allowable. The cost of replacing furniture is allowable, unless the 10% wear and tear allowance (i.e. of rental income for the year) is claimed for furnished lettings.

5) Travelling expenses
Provided the travelling expenses to and from the property are reasonable, they should be claimed at 40p per mile on the first 10,000 miles and 25p per mile thereafter in any tax year.

6) Advertising costs
Costs relating to advertising the vacant property for letting.

7) Legal and professional fees
Legal and professional costs associated with letting the property, unless the least is for more than one year and it is not a renewal.

8) Accountancy fees
Accountancy fees for preparation of the rental income statement for the tax return.

9) Interest costs
Interest costs on loans for the let property.

10) Loan fees
The costs of obtaining loans for the purchase of the let property.

11) Debt collection and bad debts
As rental income is declared on the basis of rental income due for the tax year, irrespective of when it is received, the costs of debt collection and irrecoverable rental amounts can be claimed.

If you wish to discuss the above points please contact David Cane on 020 8390 6878.