Allowable Deductions (B)

Question 1

Ins?

Answer 1

Insurance

Question 2

A?

Answer 2

Agent’s fees

Question 3

Man?

Answer 3

Management expenses

Question 4

R?

Answer 4

Repairs and maintenance

Question 5

Mot?

Answer 5

Motor expenses

Question 6

F?

Answer 6

Finance expenses in relation to residential property is not allowable

Question 7

Imp?

Answer 7

Improvements aren’t allowable as they are capital expenditure

Question 8

Exp?

Answer 8

Expemnditure on plant and machinery used in maintenance of property are not allowable

Question 9

When is there no relief for residential lettings?

Answer 9

Initial cost of furniture and furnishings

Question 10

When is there relief for residential lettings?

Answer 10

When assets are replaced

Question 11

What does not apply for furnished holiday lettings?

Answer 11

Replacement furniture relief

Question 12

What is the pre-trading expenditure rules? (relief)

Answer 12

Relief is available for revenue expenditure incurred before letting commenced

Question 13

If a fridge is replaced with a fridge freezer?

Answer 13

Only cost of an equivalent fridge qualifies for relief

Question 14

An improvement is a replacement?

Answer 14

Correct

Question 15

Basic rate tax deduction rule applies to?

Answer 15

Acquire, improve or repair residential property

Acquire equipment or assets used for residential letting business

Question 16

If taxpayer incurs mortage interest expense of £5000 on a residential property

Answer 16

Not an allowable expense

Tax relief at £5000 @ 20%. Deducted from income tax computatuon