Investment Property Accountants - WARR & CO

Investment Property Accountants

FREQUENTLY ASKED QUESTIONS

Question: I own two buy to let properties, what records must I keep?

Answer:
You should keep receipts for all payments in respect of each property.
A certificate of interest should be obtained for each tax year from your mortgage lender.
If you use a managing agent, the monthly statements must also be retained.
Records should be kept for each tax year (6 April to 5 April) and retained for six years.
A summary of Income and Expenditure should be prepared for each property for each tax year.

Question: I’ve purchased a new washing machine for the rental property, can I claim this as a tax deduction against my rental income?

Answer:
Assuming you rent your property fully furnished, there are two answers to this;

  • Yes, if you do not claim the Wear & Tear allowance.
  • No, if you claim the Wear & Tear allowance.

Question: What is the Wear & Tear allowance?

Answer:
The Wear and Tear allowance is available to you if you let your property fully furnished. Rather than claiming the tax deduction for replacement items such as an oven, sofa etc, an allowance is available to claim each year. The calculation is 10% of the annual rent less any rates paid in the year.

Question: I am considering purchasing an investment property. Should I use a limited company as a vehicle to hold the property or hold it in my name?

Answer:
There is no generic answer as this depends on your investment plans and personal circumstances. Individual advice would be necessary.
Consideration must be given to CGT, IHT, estimated ownership term, funding and loan requirements and taxation.

Question: What expenditure may I claim against my rental income?

Answer:
The following list is an example of relevant expenditure that may be incurred in connection with renting property:

  • Mileage to property for Inspection visits
  • Gardening
  • Service charges for common areas of the development
  • Replacement items such as carpets, windows
  • Repairs and painting
  • Mortgage interest
  • Management and letting agents fees
  • Cleaning
  • Tenancy scheme deposit charges
  • HIPS EPC costs
  • Wear & Tear allowance
  • Insurance

 

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This domain is owned by Warr & Co Chartered Accountants which is a member of the Institute of Chartered Accountants in England & Wales (ICAEW). Warr & Co is a trading name of Warr & Co Limited. (Registered in England & Wales No.: 07676926) Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact Peter Edwards on 0161 477 6789 or email us at info@warr.co.uk