Income from property – What do I include on my tax return?

Income from property – What do I include on my tax return?


Your tax return must include any income
from property in the UK or European Economic Area. For property income
outside these areas fill in the foreign income tax return pages instead. In this
section, don’t include income from letting rooms, such as bed and breakfast,
unless you’re claiming rent of room relief. This counts as trade and goes
elsewhere in your tax return. To begin, tell us what type of property income you
had during the tax year, including furnished holiday lettings. On this page
we need to know how much property income you received. If you’re claiming the
property income allowance, if you are then you can’t claim expenses. If you’re
using traditional accounting, that means you record income and expenses when you invoice customers or receive a bill. If you’re not claiming the property income
allowance, enter your running costs here. You can include the cost of repairs, but
not improvements or upgrades. If your total annual income is below
£85,000, add your total running costs here, but don’t
include residential finance costs. Next enter 50% of your residential
finance costs. You can enter the other 50% further on. On page 4, enter what we
call adjustments – claims that could reduce your tax bill. For example, if you
claim rent of room relief and your income is over the threshold, add the
exempt amount of £7,500 or £3,750 if you’re a joint owner. On page five you’ll see your
adjusted profit or loss for the year. If you’re in profit, you must enter losses
from an earlier year. We’ll then calculate your taxable profit. This cannot be more
than your adjusted profit for the current year. Enter the remaining 50% of your residential finance costs here. You can also enter any
residential finance costs you couldn’t use in the previous tax year. This will
help reduce your total tax bill. Finally, on page six add any extra information.
Then check your figures on the summary screen. You can go back to make
corrections. You can find more information about Self Assessment on
GOV.UK

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