Landlords need to register for Self Assessment .
They will need to keep track of the rental income and claim allowable expenses
- Mortgage or Loan Interest (but not capital)
- Repairs and maintenance (but not improvements)
- Travel costs to and from your properties for lettings or meetings
- Advertising costs
- Agents fees
- Buildings and contents insurance
- Ground Rent
- Accountants Fees
- Rent insurance (if you claim the income will need to be declared)
- Legal fees relating to eviction
Rent less expenses will either produce a profit or a loss.
Making a loss
If you have residential buy to let properties that you own personally you can deduct any losses from your property letting profit and enter the figure on your Self Assessment form.
You can offset your loss against:
- future profits by carrying it forward to a later year
- profits from other properties (if you have them)
You can only offset losses against future profits in the same business.
If you incorporate your Buy to Let business, see our blog in incorporation tax relief..
Can a Residential Property Investor use Incorporation Tax Relief?
If you transfer your business in exchange for shares to another company, you can use any unused losses against your income from the new company.
Can you save tax by transferring your self employed losses to a company?