- All income except capital receipts arising from an interest in land is part of the rental business. As with any other business, property income can include payments in kind as well as cash receipts.
- It is also advisable to consider profits or losses from furnished properties separately to ensure that the calculation of any Wear and Tear Allowance claimed is restricted to the relevant furnished lettings.
- Rental business expenses must be incurred wholly and exclusively for business purposes and not be of a capital nature.
- The Rent a Room Scheme is aimed at individuals who let furnished living accommodation in their only or main home, for example, by taking in a lodger.
UK property income is entered on the Property pages of the self-assessment and you can use SimpleTax to file your tax return. By adding "+New Page" you will find 3 straightforward types of Property Income:
- Property: consists of any earnings from renting, leasing or any other use of one or more properties.
- Rent-a-room: if you have rental income earned from either renting out an individual room or an entire floor in your home and the yearly expenses ARE NOT equal to or greater than £7,500 (or £3,750 if you share your home with another person). Otherwise, it's better to declare that income as regular 'Property income'. Note: you do not have to own the property in question and this income can be from running a bed and breakfast as well as renting rooms on AirBnB.
- Furnished Holiday Let: a property in the UK/EEA that is commercially available to let for more than 210 days in a year, actually let commercially for more than 105 of those days and doesn't exceed 155 days under lets of over 31 days each. Any income you received from this type of property must be declared here.
Each of these pages provides you all possible income and expenses groups with descriptions, making it very easy for you to know "what goes where" and which expenses can be deducted for each particular case.
With SimpleTax it's very simple. Very quick.