Allowable expenses are the expenses you spend in the day-to-day running of the property. Please see below the list of possible allowable expenses for landlords:
· letting agents’ fees
· legal fees for lets of a year or less, or for restoring a lease for less than 50 years
· accountants’ fees
· buildings and contents insurance
· interest on property loans
· maintenance and reconstructions to the property (but not improvements)
· utility bills, like gas, water and electricity
· rent, ground rent, service charges
· Council Tax
· services you remunerate for, like cleaning or gardening
· other direct values of letting the property, like phone calls, stationery and advertising
Allowable expenses don’t include ‘capital expenditure’ – like buying a property or restoring it beyond repairs for wear and tear.
You may be able to declare tax relief on money spent on replacing a ‘domestic item’. This is called ‘replacement of domestic items relief’.
Domestic items include:
· crockery and cutlery
You must have only bought the domestic item for use by occupants in a residential property and the item you replaced must no longer be used in that property.