Expenses (e.g. council tax, insurance) during time a rental property was empty awaiting sale?

Hi,

Whether expenses for your property business are allowable will depend on when the business ceased, please see PIM2510 which states, if the business only consisted of letting a single house, it would cease when the tenant left and the customer began to use the house as a private residence or, alternatively, when they decided the house wouldn’t be re-let.

PIM2510 - Beginning and end of a rental business: cessation

You can find guidance on allowable expenses here:

Work out your rental income when you let property

Utility bills and council tax are usually the responsibility of the tenant, therefore not usually an allowable expense.

PIM2140 - Deductions: main types of expense: rates and council tax

For guidance on repairs which are classed as revenue expenditure and are allowable please
see

PIM2030 - Deductions: repairs: is it capital?
PIM2025 - Deductions: repairs: overview

Revenue costs of travelling between different properties solely for the purposes of the rental business are an allowable deduction in computing rental business profits. But the cost of travelling from home to the let property and back will only be allowable if the purpose in making the journey is exclusively a business one. The wholly and exclusively rule must be met. 

PIM2220 - Deductions: main types of expense: travelling expenses

Rent paid by the tenant after the cessation of the rental business must be reported to HMRC on your tax return for the same year of receipt.

PIM3000 - Beginning and end of a rental business: post-cessation receipts and expenses

Thank you.

For an overseas non resident owner owning a flat for letting out, could such letting be regarded as a rental business noting it is a flat not a house and only one flat is involved?

Hi ,
 

Thank you for your question. It does not matter whether the property is a house, flat, or even part of a house or flat (i.e., a single room, annexe, etc). Our Property Income Manual (section titled ‘PIM1020 - Introduction: what is a UK property business?’) confirms that profits from UK land or property are treated, for tax purposes, as arising from a business. It also confirms that it does not matter how many properties the taxpayer has, or how many different types of income they receive from land and property. The Property Income Manual is available at: https://www.gov.uk/hmrc-internal-manuals/property-income-manual  . Thank you .

Hello, We have a rental property that is likely vacant after the current tenant leaves and new tenant moves in. Can we deduct the mortgage interest during this period of vacancy? Thanks!

Hi lu,
As long as the property is not being used for any other purposes then it will be an ongoing concern and would qualify for relief.
Should you stop using the property for rental or decide to sell the property please refer to our web pages for further information.
Thank you,