Published 27th March 2017
The Property Income Allowance is available from April 2017
The Property Income Allowance is an allowance of £1,000 that may be used instead of the normal or usual method of calculating deductions from rents etc. It will only be of benefit to those with very low outgoings.
Example 1
Alan lets out his car parking space for £800. He has no outgoing costs. He may deduct £800 Property Income Allowance. There will be no tax to pay on the rent.
Example 2
Brian lets out his garden shed for £1,200. He has only £50 of expenses but he may deduct the full £1,000 Property Income Allowance and is taxed on £200.
Example 3
Charles rents his garage for £5,000. He has expenses of £1,200. He may use the Property Income Allowance but his taxable profit will be lower (and his tax will be lower) when claims the actual expenses as a deduction from rent.
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The information contained in this article is believed to be correct at the time of publication. The content of this article is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.