Published 27th March 2017

The property allowance is available from April 2017.

The property 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 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 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 allowance but his taxable profit will be lower (and his tax will be lower) when claims the actual expenses as a deduction from rent.