Deduction for payment to Housing Association

[pjclar02]

Hello there

An individual has an arrangement where he owns 25% of his property, and rents the other 75% from the Housing Association. He has now moved abroad, and with permission of the Housing Association, is subletting the property.

Is the rent payable to the Housing Association a deductible expense against the rental income please?

Thanks

[AGoodman]

If the HA is a co-owner of the flat, it is not a question of deductions, only 25% of the rent is his in the first place. The other 75% belongs to the HA so is never his.

[bd6759]

If the HA is a co-owner of the flat, it is not a question of deductions, only 25% of the rent is his in the first place. The other 75% belongs to the HA so is never his.

That is not correct.

[pjclar02]

Thanks for responses

6d6759 could you shed any light on the legal or tax position of this arrangement please?

[AGoodman]

I was indeed incorrect. I see you are paying rent for the 75%.

Not a technical answer but it looks like the rent is probably deductible:

https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income#allowable-expenses

(under "Allowable Expenses")

[bd6759]

The legal position is that you have unfettered enjoyment of the property to the exclusion of the HA in return for the rent you pay them. If you sub-let, then the income is yours, not the HAs.