If you own and let property either on your own or jointly with one or more other people you have to include details of your share of the income and expenses on your tax return. If you do not receive a tax return you must ask the Revenue for one.
Working out the amount received is usually straight-forward. Working out the maximum you can claim in expenses is less so. Claiming too much means you may be subject to investigation, coupled with back taxes, penalties and interest. Claiming too little means that you may well pay more tax than necessary.
The areas which often trip people up include property repairs, maintenance and improvements, a wear and tear allowance for furniture and furnishings and claiming legal and management fees.
Another area which is regularly miscalculated is the mortgage interest. It is not widely known that in some cases you can claim relief not only on a buy-to-let mortgage used to purchase your rental property but on other mortgages owed by you as well.
Property income is always received by the owners on a 50:50 basis unless an election has been made to alter this. We can look at your tax affairs and let you know whether it would be worthwhile changing this ratio.
For advice on these and all other aspects of the taxation relating to rented property please contact our Tax Team on 01622-728603