UK Property Refurbishment To Reduce & Avoid Property Tax Explained
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- čas přidán 11. 09. 2024
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UK landlords that refurbish their buy to let properties will be surprised to know that most of the costs are revenue in nature. This means that that costs help reduce property tax paid to HMRC on their UK self assessment tax return.
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In this video you will learn from Simon Misiewicz, your Finance & Tax Director
1. How to keep and store your receipts
2. What information must be shown on your expenses
3. Refurbishment costs that may be offset against your property income
4. Refurbishment costs that will be treated as capital costs
5. Costs that most accountants think are capital but are in fact allowable to offset against your property income
6. Capital allowances and how they may be used to reduce total taxable income
7. What VAT issues landlords must be aware of.
Free Refurb Tax calculator
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Thanks for such an informative video. I have two questions: can I claim mileage for visiting properties, estate agents etc on a self assessment? If it's a yes, can I claim 45p per mile or should I provide evidence such as petrol receipts?
Yes to 45p for the first 10,000 miles then 25p thereafter
Hi Simon, very useful clip. Are the bank transfer payment together with invoice as evidence strong enough to claim for cost allowable?
Absolutely they are good evidence
Thanks for your videos Simon,
Will capital allowance such as double glazed windows or equipment and machinery in other businesses will come off the net profit in one go ( the whole amount of cost) in the same year or will it spread across the useful life of these asserts which is set up by the HMRC?
If you treat the cost as a replacement then you will offset the cost in full in the first year
If you have a holiday let or a HMO or a commercial building and claim capital allowances it is still possible to write off the full cost in year of acquisition.
@@UK-Property-Tax-Accountants Thnx Simon
You are very welcome. May o ask how this video has helped?
What other videos would be useful to you?
@@UK-Property-Tax-Accountants these videos helped me a lot to understand things in more details compare to other people videos , if you explain more details in each topics with real examples could help more :) but hounestly yours are still one of the best to watch.
Great feedback about examples. I have to say that I have not done that enough but will get better with each video
Thank you for the kind feedback and time writing it
Have a great week
Simon
Hi Simon. Great Video. One question - are training costs allowable, e.g. property mastermind fees etc. Thanks
Provided these costs are adding to your knowledge and not new knowledge then these costs will be allowed.
If you have attended a course before this one then it will be allowed
Hi Simon,
Will the upkeep of a grade 2 listed building be allowed as an offset on a buy to let, and also the building insurance and service charges?
The upkeep may be split between a revenue expense and capital dependent of the required work. Most times it is just maintenance and 100% allowed to be offset against rental income
@@UK-Property-Tax-Accountants Thank you Simon.
You are very welcome 🙏
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Hi,
Buying few rental properties which don’t have fridge/freezer, dish washer, tumble dryer etc. If I buy these for the rental properties, are these costs allowable pls? Thank you
These costs will be considered capital in nature and won’t reduce income tax liabilities
If you have never claimed the 45p/mile, can you backdate this expense? How many years?
You can reopen two lots of SA tax returns to make such amendments
@@UK-Property-Tax-Accountants Looking forward to a consultation in due course and building up a mutually beneficial long term relationship.
@@DIPU1036 Most kind and good luck with the tax resubmissions
If you are buying a house to rent and need to do these works to renew a kitchen / boiler etc are these allowable or is that something that you claim from capital gains - I was always of the impression that you can only claim as a yearly loss if it’s something you have already rented out and THEN had to repair?
You can claim costs before a property is let out. This is provided that the property is in a lettable state. A buy to let mortgage has a condition to say that the property must be in a lettable state
To add to the above comment you can only get a buy to let property mortgage if the property in question is in a lettable state
This informs you that the costs of refurbishment will be allowed despite it being before the property is actually let out
Very informative
Thank you most kind
Very helpful
Thank you Marc
What was the most useful aspect?
What new materials could we develop to make our channel even more useful?
Personally I'm just looking into buying a second property to rent out so I'm trying to work out how tax will effect me. I have a very basic understanding at the moment. It's was useful to get an idea of what I can claim for and what receipts I should be keeping. There's not much UK content on CZcams so I'm very surprised this video hasn't got more views.
Thank you for the kind words.
Do you have a property strategy in mind type (single let, HMO, serviced accommodation etc) or location in mind?
@@UK-Property-Tax-Accountants not a HMO, I've been a property manager before and I know it was becoming a lot harder to get a licence for that in my area (Oxford) I'll be looking to get a basic 3 bed to start with. I've got enough equity in my house to move forward so I need to find out what the banks will offer. Any advice is always appreciated. Thanks
Get a good mortgage broker to save you a lot of time and energy
Hi Simon, could you use a director's loan (assuming you used a spv) as an expense?
Sadly not. A directors loan is a debt / balance sheet item