Self Assessment tax form- questions

[MaxP]

I'm slowly making my way through my online SA tax form and am now filling out the UK Property section. This is the first year I've let out what was once my principal private residence and have some questions relating to the form.

I didn't start letting the property until almost the end of the 09/10 tax year.

My rental income is paid on a monthly basis, but the tax year does not run on a monthly basis. So, how do I calculate the figures for rental receipts and loan interest.

For example.
House let from 3rd March at 750pcm.
Tax year runs till 5th April 2010.

Do I calculate rents / interest payments based on a daily rate for the month?

In addition. I have taken out landlord letting insurance for 12 months. Do I claim for the portion of the insurance that falls in the tax year or the whole lot and then claim a private use adjusment for the period of the year that I lived in the property before it was let?

I have a couple of other questions which I'll come back to, but these are the most pressing at the moment.

Thanks for reading.

Max

[jeffrey]

By "SA", do you mean South Africa or Self-Assessment?

[MaxP]

Sorry, SA = Self Assessment

[Phlash]

When did you take out the loan and for what purpose?

[Gordon999]

Are you completing your income & expenses on form SA105 ?

I would calculate a first draft on "one monthly basis" so
income from property = 750
less insurance expenses = one month ( divide annual premium by 12 )
less loan interest = one month ( see statement from mortgage lender )
less letting agent cost = one month ( divide bill by 12 )

Since actual letting period is "one month + 3 days" , then increase the above calculated one month expenses by 10% to enter on the tax return.

adjusted rental income = 825 pds
adjusted insurance expense = 1.1 x one month rate
adjusted loan interest = 1.1 x one month interest
adjusted agents cost = 1.1 x one month charge.

[MaxP]

Sorry, I've been away - hence the delay.

Many thanks for the reply. Sounds like a sensible approach.

[MaxP]

Hi, thanks for the help so far. I have another question relating to the Self Assessment property pages. My question relates to legitimate expenses. In particular the following 3 boxes.

> Box 22 : Rents, rates, insurance, ground rents, etc
> Box 25 : Legal, management and other professional fees
> Box 26 : Cost of services provided, including wages

Can someone confirm that the following fees incurred in letting the property can be counted as legitimate expenses. Assuming they can, do they relate to box 22, box 25, box 26 or another box? (I have listed the fees paid against the boxes I think they relate to).

Box 22)

1. Landlord insurance - i.e. property and contents insurance (see previous question)
2. Insurance against a loss of rent.

Box 25)

1. Gas safety certificate and service fee.
2. Electrical safety inspection fee.
3. Monthly management fee(s).
4. Energy certificate (required to rent)

Box 26)
1. Cleaning fees to prepare the property (required by agent before lease commences) - or should this be in Box 25?

Once again, although these fees were incurred at the start of the lease period, I presume that I calculate the expense to be the portion of the fee that relates to the lease period in the tax year (i.e. one month and three days, as mentioned above). Alternatively, should any be entered as the total fee, rather than a portion?

Finally. I had to pay a check-in fee. Should this be regarded as a management fee? (i.e. part of box 25).

Thanks for people's help here. It's much appreciated.

Max

[GJMSurrey]

My first was also last year. Right or wrongly (and for your interest) my accounts are structured around the following. I have one property letting 4 rooms with some shared areas :-

Rent, rates, insurance, ground rents etc
All utility bills and council tax etc
Extended warranties/service plans
Rent guarantee/legal insurance premiums
Contents Insurance (Landlords cover, I rent a share property)
Boiler/Central Heating Insurance
Buildings Insurance (Leaseholder fees)
Service Charge (Leaseholder fees
Ground Rent (Leaseholder fees)

Legal, management and other professional fees
Estate agent fees
Accountant fees
Legal fees / eviction etc
National Landlords Association membership fee
Tenant Referencing
Advertising
Other agent/admin fees

Costs of services provided, including wages
Cleaning
Gardening
Other paid for services

Property repairs, maintenance and renewals
Gas Safety Certificate
Other safety certificate (e.g. Electrical)
Landscaping & Admin (Leaseholder fees)
Annual general Maintenance (Leaseholder fees)
Other general repairs
Keys & Locks

Loan interest and other financial costs
Mortgage and loan interest related to the let property

Other allowable property expenses
Travel expenses (if i'm not using an estate agent to let)
Motor Expenses (if i'm not using an estate agent to let)
Home office costs
Telephone, fax, stationery & letters
Research costs
Computer equipment

Pre Trading Expenditure
If any was applicable

Generally i'm calculating everything monthly and I 'ignore' the 5 days at the beginning of April. For example, if I pay £80/month for Electric and Gas, I will put the March payment in March and April Payment in April. I will not both entering 5 days of Aprils payment in to the earlier financial year. I keep my approach consistent.

Not sure if this is right. I think I remember reading that this is accepted by HMRC but i'm not 100%

[Telometer]

Preparing your accounts to 31 March is perfectly acceptable.


as for OP's question as to which box, that all looks fine. The key thing is to be consistent from year to year so that the accounts look similar in most years.

[MaxP]

Thanks GJMSurrey, that was just what I was looking for. You've been a great help.

Thanks all.

Max

[MaxP]

I seem to remember that I can't make any claims for repairs / expenditure before the start of the tenancy. For example, I replaced my boiler after it broke down in December with an energy efficient boiler, rather than getting the fan component repaired.

I also replaced two dripping taps (kitchen, outdoor), just before the property was let (start of Feb). Property was let at the start of March.

Almost there!

[Telometer]

Probably the better answer where the property was previously your PPR.