Tax rebate on Buy to Rent

[nvedi777]

Hi

I am thinking of investing in a buy to rent property. I have a few queries about how to save the tax.

1. Do I get full rebate on the interest, I pay?
2. Do I get rebate on the lease rent, I pay every month?
3. Do I get rebate on the commision paid to the agent?
4. Do I get any rebate on spending for furnishing the property?
5. Do I get any rebate on the fees paid to the solicitor?
6. Any other expenditure rebate that is possible.

and anything I must be aware of while investing in such a property?

I will really appreciate, if you could help.

[Ian McTernan CTA]

You do not get a 'rebate' as such. The rental income and expenses are 'ringfenced' and not deductable against other income. You can claim for 1., 2. 3., but not 4. or 5. Furniture will enable you to claim the 10% of gross rent wear and tear deduction on your tax retrun, solicitors fees are a cost of purchase and are added to the cost when calculating capital gains in due course.

There is no deduction for any type of capital repayment or repayment vehicle.

You can also claim the cost of insurance. It is usually best to keep receipts for everything and then instruct a professional advisor to run through these to determine what is allowable and what isn't, as some items can be in very grey areas.

There are a lot of tax angles to consider when starting a buy to let, including the possibility of putting the property in a limited company, and professional advice should be sought.

Regards.

Ian McTernan CTA
McTernan Associates Ltd
ian@imcternan.com