Property Income

Question 1

Property Income: How is it taxed (what column?)

Answer 1

As non-savings income

Question 2

Property Income: How are income/expenses from multiple properties treated?

Answer 2

Pooled together

Question 3

Property Income: Default basis
And one to assume in exam

Answer 3

Cash basis
(Unless exceeds limit then accruals)
(And can elect to use accruals basis)

Question 4

Property Income: Allowable deductions: Is it allowable?: Insurance
E.g. buildings insurance

Answer 4

Yes

Question 5

Property Income: Allowable deductions: Is it allowable?: Finance costs relating to non-residential properties
E.g. mortgage interest

Answer 5

Yes

Question 6

Property Income: Allowable deductions: Is it allowable?: Legal and professional costs
E.g. Agents fees

Answer 6

Yes

Question 7

Property Income: Allowable deductions: Is it allowable?: Rates and taxes paid by the landlord
E.g. Concil tax
Water rates

Answer 7

Yes

Question 8

Property Income: Allowable deductions: Is it allowable?: Ancillary services provided by the landlord
E.g. cleaning
Gardening

Answer 8

Yes

Question 9

Property Income: Allowable deductions: Is it allowable?: Repairs and maintenenace
E.g. painting
Decorating

Answer 9

Yes

Question 10

Property Income: Allowable deductions: Is it allowable?: Fixed rate deductions for motor vehicles used in the property business
Unless capital allowances have been claimed

Answer 10

Yes

Question 11

Property Income: Allowable deductions: When can deductions be claimed?

Answer 11

ONLY when:
1. Rented out
2. Available for rent
(E.g. time apportion if landlord lived in property)

Question 12

Property Income: For what are capital allowances available?

Answer 12

1. P&M used for repairs and maintenance
   (Not P&M for rental property e.g. furniture)
2. Motor vehicles used in the property business
   (Unless fixed rate deduction claimed)

Question 13

Property Income: Relief: Initial domestic items used by a tenant expense
E.g. beds, fridges, floor coverings, crockery

Answer 13

None

Question 14

Property Income: Relief: Replacing furniture

Answer 14

Allowable

Question 15

Property Income: Relief: Replacing furniture: When not fully furnished

Answer 15

Allowable

Question 16

Property Income: Replacement furniture relief: Treatment of proceeds from sale of asset being replaced

Answer 16

Relief deducted by that amount

Question 17

Property Income: Replacement furniture relief: Treatment of costs of disposal of old asset

Answer 17

Relief increased by that amount

Question 18

Property Income: Replacement furniture relief: Increase/decrease from old asset: Condition

Answer 18

Old item no longer available for use by the tenant

Question 19

Property Income: Replacement furniture relief: Replacement MUST be

Answer 19

Like-for-like replacement

NOT Improvement

E.g. if washing machine replaced by washer-dryer, only the cost of a replacement washing machine would qualify for relief

BUT if improvement just because of advances in technology is fully allowable

Question 20

Property Income: Are costs for replacing fixtures deductible?

Answer 20

IF integral to property AND not normally removed if sold THEN Yes - Deductible
As a repair to the property
E.g. Sanitary ware
Light fittings
Boilers

Question 21

Property Income: Finance Costs: Mortgage repayments (on rental properties): Are they allowable property income expense?

Answer 21

The Capital element is NEVER allowable property income expense