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Where Taxpayers and Advisers Meet

calculating profit on uk property let

CGT Newbe
Posts: 7
Joined: Tue Mar 06, 2018 3:55 pm

calculating profit on uk property let

Postby CGT Newbe » Tue Sep 18, 2018 5:07 pm

Hi.

I need to catch up on a couple of tax returns and need to calculate my profit. I'm not an accountant etc so would appreciate some guidance on the deductions allowed and any relevant allowances to minimise the profit. My limited understanding is that the total annual rent less any running costs and fees in the year e.g. mortgage interest, letting agents fees, repairs etc. is the profit. Are there any other 'allowances I can use? Have heard people mention wear and tear?

Thanks in advance.

AdamS93
Posts: 228
Joined: Tue Sep 26, 2017 6:28 pm

Re: calculating profit on uk property let

Postby AdamS93 » Wed Sep 19, 2018 8:32 am

The wear and tear allowance is no more unfortunately.

If you wanted an accountant to help you ensure you only pay the tax that is due, their fees of course would be a tax deductible expense ;)

The way you get tax relief for mortgage interest has changed significantly recently as well so make sure you’re up to speed on that.

CGT Newbe
Posts: 7
Joined: Tue Mar 06, 2018 3:55 pm

Re: calculating profit on uk property let

Postby CGT Newbe » Wed Sep 19, 2018 9:41 am

Hi Adam. Thanks for the guidance. Re. mortgage interest just done some googling and would like to check my understanding. from this financial year I can't deduct 100% of my mortgage interest but only 75%? the only 50%/25%/0% subsequent years? Is this correct? Also there was some discussion on an increase in personal allowance to help offset this reduction, can you clarify for me please?

Re. fees I did look into that but the fees were approx. 2.5k so if I did the sums right I would save 1.0k on the tax but my outgoings would overall increase by 1.5k. So as us aero engineers aren't as well remunerated as some of our financial friends I thought I would see if I could save a few bob ;-)

GlobalTaxAdviser
Posts: 633
Joined: Fri Dec 05, 2014 1:18 am

Re: calculating profit on uk property let

Postby GlobalTaxAdviser » Wed Sep 19, 2018 2:22 pm

I don't think not even the big four accountancy firms would charge 2.5K for a a couple of tax returns

£500 + VAT maybe about right

Kind Regards

GTA

AdamS93
Posts: 228
Joined: Tue Sep 26, 2017 6:28 pm

Re: calculating profit on uk property let

Postby AdamS93 » Wed Sep 19, 2018 4:39 pm

You can’t increase your personal allowance. You can increase your basic rate band, but you will have you invest in a pension or make a charity donation....

If you have kept good records, fees should be around £200 + VAT per year. You will probably find cheaper accountants (mainly online ones) and some will be more expensive, especially if they are in London.

CGT Newbe
Posts: 7
Joined: Tue Mar 06, 2018 3:55 pm

Re: calculating profit on uk property let

Postby CGT Newbe » Wed Sep 19, 2018 6:12 pm

Final question if I may on the obsoleted wear and tear. Was it only ever applicable for furnished flats or did it ever apply to unfurnished?

Re. costs am going to make a call thanks as was quoted 2.5k so I must have mis-understood something there!


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