Tenancy deposit protection was introduced by the Government in April 2007 for all assured shorthold tenancies in England and Wales where a deposit was taken from the tenant. The aim is to make sure the tenant is treated fairly at the end of their tenancy. The landlord or letting agent have a number of legal obligations, as set out in the Housing Act 2004, that they need to fulfil to ensure the tenants deposit is protected lawfully. The tenant must be notified of this. This is cover is inexpensive and an easy process for either the Letting agent or Landlord if not using a letting agent.
The costs and expenses incurred in maintaining your rental income are generally allowable;
- Rental (including ground rent), rates, insurance and other like items that you pay whether the property is rented or not.
- Repairs, maintenance, renewals.
- Finance charges and interest on loan are not deductible, but limited relief is available for loan interest and other finance costs.
- Legal and professional costs including letting agent’s fees, accountant’s fees, legal fees on rent collection.
- Costs of services provided, e.g. cleaning
- Other expenses, e.g. advertising, travel, post, use of home as your office.
All management and letting agents who collect rent for their landlords must deduct basic rate tax and pay to HMRC unless told otherwise by H.M. Revenue & Customs (HMRC).
Non-UK residents can apply for approval from H.M. Revenue & Customs (HMRC) to receive rent gross by completing form NRL1. On approval, management and letting agents do not need to deduct tax at source. This is only an exemption from having the agents deduct tax, it does not exempt the landlord from tax on rental income.
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