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Posted Sun, 07 Nov 2021 16:24:19 GMT by Contro
I own a flat in Spain that I have renovated. As I am renting it as social housing I received a subsidy from the local administration to cover some of the cost of the renovation. My questions are: * do I need to pay tax on the subsidy? * if yes, what kind tax is it (income, capital, ...?) Thanks
Posted Mon, 08 Nov 2021 13:51:54 GMT by HMRC Admin 17

The following grants or contributions are likely to be taxable as income:

Contributions to expenditure on the repair of a let property, Insurance recoveries on policies covering non-payment of rent and Refunds
or rebates of rental business expenditure.

Grants to meet capital expenditure should normally be treated as reducing the qualifying capital expenditure for capital allowances purposes
(to the extent that the grant relates to an item that capital allowances are claimed on).

Further guidance can be found here :

Property Income Manual  .

Thank you.

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