First Time Landlord filling out Form 12

B

Bearish

Registered User
Messages
13
As an accidental landlord I started renting out my former home in November of last year. I am filing my Form 12 now so that I can get it out of the way but am a little confused on what boxes to fill in on the Form 12 so would appreciate any help.

The basics:
Rent for 2013 = 2400
Expenses = 2,621
Capital cost of new furniture, appliances, kitchen and work done to the house etc = 18,066
75% of Interest expense = 1,131


So on the Form 12:

Gross Rent = 2,400
Add Clawback of Section 23 = nil
Less: Repairs = 300
Allowable Interest = 1,131
Other = 2,321

Net Rental Income = nil
Net Rental Loss = - 1,352

Capital Allowances from Prior Year = nil
Capital/Balancing Allowance for 2013 = is it 18,066 or 2,258???
Capital Allowances used in 2013 = nil
Capital Allowances available for carry forward or offset = is it 18,066 or 2,258
Excess Case V capital allowances = nil

Losses from prior year = nil


Does this look correct?

Would really appreciate any help/advice...
 
I think there might be a few issues here...

You are not allowed to claim anything for pre-letting expenses except advertising the property. Anything you did before the property was let for the first time is not allowed as an expense, so €2.6k seems very high for 2 months. Are you including things that were done before the tenancy commenced?

The 18k includes "work done to the house". What sort of work? An extension or new bathroom for example is largely not allowed as they cannot be removed from the premises without causing significant damage, so these things simply benefit you in that they increase the attractiveness/value of the property but they cannot be claimed as an expense in a normal letting with no tax incentive scheme behind it.

You can only claim depreciation (wear and tear) on "plant" (furniture, carpets etc.) that can easily be removed from the property without damage to said property. You are allowed to assume a fair value for the existing furniture and go from there for 8 years (include 1/8 of the cost of all your "plant" as an allowable expense each year for the next 8 years, adding anything you buy new for the place in the meantime).

Capital allowances (unless you have a section x property or whatever) should all be left blank (correct me if I'm wrong please accountants! I have never had any capital allowances so can't speak from experience)
 
murphaph

the 2.6k is made up of things like:

Repair of door 130.00 LPT 315.00 Plumber 170.00 Mortgage Life Insurance 128 Panda Waste 110.00 Utilities 293.89 Insurance 313.08 BER Cert 148.00 Letting Agent 738.00 Lease 19.67 Stamps 6.00 Paint 15.60 Cleaning 150.00
etc....

I understand they all can be claimed as day to day expenses?

Elecato I saw your post before. Very helpful but I am trying to understand exactly where I include capital allowances (wear and tear) on the Form 12
 
The Capital allowances are the amount for the year. There is a long post about the base cost of fixtures and fittings which have been used for personal purposes prior to letting.
Someone might post a link.
In relation to your expenses:
Repair of door 130.00 tenants broke the door?
LPT 315.00 I don't think it has been confirmed that this is allowable yet. Either way you can only claim 2/12 of it.
Plumber 170.00
Mortgage Life Insurance 128 for 2 months
Panda Waste 110.00 for 2 months
Utilities 293.89 for 2 months
Insurance 313.08 for 2 months
BER Cert 148.00 don't know if this is allowable
Letting Agent 738.00
Lease 19.67
Stamps 6.00
Paint 15.60
Cleaning 150.00

You are missing the €70 registration fee for the PRTB which allows you to claim 75% of the interest and repairs.

Hope that helps.
 
Bearish said:
. Very helpful but I am trying to understand exactly where I include capital allowances (wear and tear) on the Form 12
Click to expand...

What does the letting agent do for the fee of nearly 800 Euro?

As another poster pointed out wear and tear is on the fixtures and fittings, basically the furniture. Anything of a capital nature, will be allowable later if you sell and are liable for CGT - capital gains tax. So keep records on this for the future.

The amounts are only calculated at two months if you've paid them for the entire year. For example if you've paid Panda Waste in January of last year for the full year, then only two months are allowed.

(Joe PRTB is now 90 Euro)
 
murphaph said:
I think there might be a few issues here...

You are not allowed to claim anything for pre-letting expenses except advertising the property. Anything you did before the property was let for the first time is not allowed as an expense, so €2.6k seems very high for 2 months. Are you including things that were done before the tenancy commenced?

The 18k includes "work done to the house". What sort of work? An extension or new bathroom for example is largely not allowed as they cannot be removed from the premises without causing significant damage, so these things simply benefit you in that they increase the attractiveness/value of the property but they cannot be claimed as an expense in a normal letting with no tax incentive scheme behind it.


You can only claim depreciation (wear and tear) on "plant" (furniture, carpets etc.) that can easily be removed from the property without damage to said property. You are allowed to assume a fair value for the existing furniture and go from there for 8 years (include 1/8 of the cost of all your "plant" as an allowable expense each year for the next 8 years, adding anything you buy new for the place in the meantime).

Capital allowances (unless you have a section x property or whatever) should all be left blank (correct me if I'm wrong please accountants! I have never had any capital allowances so can't speak from experience)
Click to expand...


I'm always mystified by this pre-letting restriction. If someone buys a New house with the intention of letting it then surely a prospective tenant isn't expected to view a shell and "imagine" the carpet, washing machine, new tiling, beds, sofa, heating system, decor, fridge, microwave oven. etc etc.
The gas/oil/electricity must be connected before the house is let also.

Is a landlord expected to skip dive and get a load of ol' rubbish for the first letting , and when the deposit is paid get the good stuff?
 
valparaiso said:
I'm always mystified by this pre-letting restriction. If someone buys a New house with the intention of letting it then surely a prospective tenant isn't expected to view a shell and "imagine" the carpet, washing machine, new tiling, beds, sofa, heating system, decor, fridge, microwave oven. etc etc.
The gas/oil/electricity must be connected before the house is let also.

Is a landlord expected to skip dive and get a load of ol' rubbish for the first letting , and when the deposit is paid get the good stuff?
Click to expand...

Assuming you are purchasing new, I believe that, from the list you included, the washing machine, beds, sofa, fridge and microwave can be included as capital items and wrote down at 12.5% per year over the 8 years.

I'm not sure what you mean by decor or why you would spend excessive money on what is, essentially, something that's usually down to personal taste. Let the tenant provide their own decor.

The pre-letting painting, carpeting and tiling cannot be claimed against any tax liability. Should re-painting or re-carpeting be needed during or between lettings, I think it's an expense to be wrote off on the year it's re-painted or re-carpeted. Someone with more experience will be able to confirm or deny this.

Regarding the heating system, it's not allowable at all. If you need to repair your current system, it's an expense to be wrote off on the year of the repair. If you upgrade your heating system, it's an improvement and can only be used to reduce your CGT liability, if any, when you come to sell.

As I say, it'd be great if someone could confirm or deny any of the above.
 
You must log in or register to reply here.
Back
Top