|Items Deductible for Rental Properties||Items NOT Deductible for Rental Properties|
|Book-keeping fees in relation to generating a rental Profit and Loss||Accountancy fees for the preparation of your annual tax return|
|Letting agent’s fees / management fees||Solicitor / conveyance fees|
|Service Charges incurred in relation to the property being let out||Stamp duty costs of acquisition|
|Mortgage interest (subject to capital account caps and new restricted amounts)||Mortgage capital repayments|
|Replacement of like for like furniture||Enhancement expenditure (such as extensions or items which provide a greater benefit|
|Repairs (such as repainting the walls)||Any other items of personal expenditure|
|Gas / water / utility bills paid by the landlord||Trading losses realised elsewhere (such as a sole trade or partnership)|
|Reasonable travel to and from the rental property for inspections||Any capital expenditure (such as new furniture)|
|Insurance (buildings, contents and public liability)||Cost of clothing (i.e. purchase of a suit to wear to meetings for your rental property business)|
|Direct costs such as phone calls, stationery and advertising cost for new tenants||Private phone calls|
|Legal fees for renewing a lease less than 50 years||Legal fees for renewing a lease of more than 50 years|
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Tax Deductible Expenses for Landlords When you let out a property, there will be inevitable items of expenses which are incurred. It is important to understand / know which of these items will be deductible against your rental income for the purpose of UK taxation. Below is a table of those which can and cannot be deducted. By all means this is not a complete list of every possible expense and each circumstance can be different.
Of course, the above is a guide to what you can or cannot deduct against your rental property with some expenses (such as the accountancy fees) providing a grey area for many property tax specialists.
In any case, we recommend that you maintain the electronic copy of all the above items to satisfy HMRC’s conditions but also to query any items which are not definitive with your tax specialist as they will be able to review any case law and provide you with an answer as to whether an item is tax deductible or not.
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