Hi all,
I have bought two BTL in mid 2017 jointly with my wife on 50/50 basis. Both properties have had full refurbs prior to letting with a lot of my own labour and only tradesman involved sparky,plumber and gas eng. There is a lot of material costs circa £10k per property used to bring it up to standard. Properties have been let from end of 2017. Now is the time to submit first accounts to HMRC.
1. I understand that all material costs used for refurbishment will be classed as allowable expenses- do I add them together and split equaly in two or do I need to seperate them for what accually was spend on each one of the properties?
2. I also understand that costs of solicitors, mortgage, advertisment, SDLT are to be used at the point of sale as way of reducing CGT- right?
3. I am employed on circa £40k, but my wife has an income of less than £1 a year.
The rental profits are to be split 50/50- do we split the losses also 50/50? And does my wife need to be registered for SA for year 17/18 as it apperas there will be substantial loss in first year due too high costs of refurbishments? If not- how can she use the loss from 17/18 against future profits from property if no record is held by HMRC.
4. I have heard about HMRC Form 17, can it be used to give my wife 100% of all profits/losses from the BTL so she can use her tax free allowance to the full in the future, rather than me having to scratch 40% tax bracket(from year 2021 I recon)?
5. Can cost of tools bought by myself and used for refurbs be offset against profits and also my own labour(a lot of it) be somewhat deducted?
Many thanks
Andre
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