Property Allowance/ Expenses for Joint Owned Property

Dear Sirs, For recent years this has been a non issue since my Pension plus Rental net income at 50% did not exceed the minimum tax threshold, however with the Pension increase the question now begs. So far I have never used the 1000 Property allowance on my jointly owned rental property with my wife. Instead I have declared expenses which have been less than GBP 1000, however in either instance it didn’t pass the 12,570 threshold for tax historically for either of us. The tax year 23/24 however with state pension increases etc, higher net rental profits due mainly to lesser repair expenses, it is likely we will both exceed the 12,570 threshold. Hence for the first time the 1000 property allowance and expenses are of particular interest. I have researched and seem to have conflicting information so I will present you with a hypothesis if I may to seek your guidance. If we assume the rental income is 8400 with expenses of 800, therefore a gross of 8400 and a net of 7600. In that instance can we each claim the 1000 property allowance against our 50% of 8400 = 4200 - 1000 , giving a net rental income of 3200 each. OR, In the instance only one of us can claim 100% of the 1000 property allowance, can the other partner claim 100% of the property expenses, eg 800. The online information is good but if I Google I get different information, some saying that whilst in theory my wife and I are both entitled to claim 1000 property allowance we cannot do so simultaneously . In that instance I am also grey as to whether the one of us who does not claim property allowance can at least claim 100% of the expenses.

Hi,

Under income from property rules, each individual is entitled to claim the £1,000 property income allowance. In your case with a gross rental income of £8,400, you would then split such income and state you wish to claim the £1,000 property income allowance. This would then in turn reduce such profit to £3,200 for each owner of the rental business.

You do have the right to decide which you can claim depending on what is more beneficial to your own circumstances, however, you may only claim one of the allowance or expenses in one year.

Thank you.