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Posted Thu, 18 Jan 2024 17:16:39 GMT by
Hi HMRC, We have set up a limited company to hold and let residential property (ie. to earn rental income). Now that our accountants are to prepare the corporation tax for the company and they requested us to check with HMRC the deductibility of the following expenses/expenditures: - Stamp duty land tax by HMRC for the purchases of the property. - Mortgage arrangement fee paid to the lender (one-off fee as a percentage of the mortgage loan) - Legal fee for the purchases of the property (including conveyance, searches, etc) paid for our legal representation and lenders' representation. - Costs to remove the old broken roof and build a new one of same size and material (ie. it is not an improvement). - Costs to renovate the house to be able to meet the AirBnb letting requirement before it can be rented. Thank you
Posted Tue, 23 Jan 2024 08:14:56 GMT by HMRC Admin 8 Response
Hi,
The costs and expenses associated with the purchase of the property cannot be set against rental income.  
Guidance is available on our website at:
PIM2120
For guidance on specific deductions relating to repairs and renewals please refer to guidance at:
BIM46901
Corporation Tax is a regime based on self-assessment, it is for the company and its advisers to determine the appropriate tax treatment of the expenditure.
Thankyou.

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