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Article: Dont let tax become a problem; The buy-to-let market is continuing to boom, but it is worth remembering that most profits are subject to income tax.
- Article from:
- Financial Advisor
- Article date:
- January 8, 2004
CopyrightCOPYRIGHT 2004 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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For income tax purposes, profits from buy-to-let are taxed on an actual year basis to 5 April.
Receipts are recognised in accordance with normal accountancy principles. This means that you include all incomings earned in the tax year regardless of when they are due or when they are received.
Expenses are also brought into the tax computation using normal accountancy principles and are the converse of the approach to receipts. This means that you deduct any allowable expenses which relate to work done for you (or goods and services supplied to you) for a particular tax year.
Broadly speaking, in calculating your rental business profits you can ...