Property rental

If you have a rental property you will have to declare the rent and expenses on your Self Assessment Tax Return. Where you have not already done so register with HMRC here. When the property is sold there is a potential Capital Gain Tax (CGT) charge. We deal with CGT, “Rent a room”, Furnished Holiday Letting (FHL) however most are straight forward property rentals. Our charges are from £150 pa and case studies based on our typical clients can be found here.

Mortgages.

Most rental are financed through mortgages for which you will have to provide details of your financial circumstances. The system for mortgage references  has changed – no more SA302’s. The interest on mortgages used for buy to let (BTL) properties qualifies for tax relief, the interest on your home does not. If you are in a position to pay off capital pay off your home mortgage first.

Keeping records.

It will help you and save our time (and therefore reduce our charges) if you keep good bookkeeping records.  The figures to be completed on the property supplement of your Return are usually:

Income – the amount of rent and any income for services provided to tenant.
 

Expenses

Rent paid, repairs, insurance and costs of services provided.
Loan interest and other financial costs.
Legal, management and other professional fees.
Other allowable property expenses.
 

Bookkeeping

Ideally we just need a summery on one sheet of paper. We are happy to check how these figures are calculated if you sent us the workings as well.  If you want us to do the bookkeeping for you then provide the agent’s statements or rent details along with particulars of all the expenses.  Where you want to do your own bookkeeping have a look at some free bookkeeping software. We recommend VT CashBook. We have a data file setup for landlords which we can send you.
 

Capital outgoings and recent changes

It is important that you understand the difference between repairs and capital improvements. There is now a restriction on the tax relief available for mortgage interest  and the way relief is granted on  “domestic items”.

Capital Gains.

Keep details of the cost of the property, expenses of purchase and capital outgoings as you may need this information for CGT purposes when the property is disposed of. If we prepare your rental accounts we track this for you.

Published 1 September 2017

Updated 16 April 2018