Renting out property – £1,000 each tax year in tax-free allowances

Did you know that you can get up to £1,000 each tax year in tax-free allowances against your property income as from the 6th of April 2017.

You can also get an allowance of £1000 each tax year against any trading income and if you have both rental property income and trading income you can get the £1000 allowance for each, but it’s not without its rules of course where HMRC are concerned.

If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. But you may be required to complete a tax return for other income.

If your genuine allowable expenses are more than your rental income it may be beneficial to claim expenses instead of the allowances and by completing a tax return each year, you can crystallise these losses and carry them forward against future income.

Gross income means the total amount you would put on your tax return before any allowances or expenses are taken off. There may be circumstances where it is more beneficial to you to complete a tax return every year even if your income is £1000 or less and the chat with an accountant or specialist tax advisor will explain this to you. Well losses are involved. It is beneficial to claim this on a return as you never know when you will need them in future to offset any taxable income.

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