Allowable expenses in between lettings

M

Manuel

Registered User
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153
Hi,
Are the following allowable expenses between lettings?

- Electricity
- Petrol for trips to the house for maintenance, viewings, etc
(I live 15 miles away)

Thanks.
/M.
 
Yes, electricity and petrol to take you to and from the property are allowable along with advertising for new tenants etc.
 
T McGibney said:
Really?
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According to my accountant, yes.

I collect my rent via bank transfer - anyone trying to claim x amount x 52 for collecting rent will fall foul of Revenue if audited, according to him.

I have to visit my property from time to time for repairs etc. and my accountant told me to put through at least 2 petrol receipts per year to cover these legitimate visits. I also keep a log of all visits and the mileage incurred for each visit, which I can back up with dated tradesmen's receipts.

And, according to Mandelbrot in a previous discission on this subject here
mandelbrot said:
If you can prove that an expense is wholly and exclusively incurred in the furtherance of the trade, then you'll be allowed it.

If you tried to tell a Revenue auditor that you flew to England every month to collect the rent for your UK rental property, its just not going to wash! But if you spent a week over there overseeing maintenance work on the house in between tenancies (and this could be proven because you would have receipts with the appropriate dates etc. from the tradesmen, hardware shops etc.) then I don't see why the travel costs wouldn't be allowable.
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delgirl said:
According to my accountant, yes.

I collect my rent via bank transfer - anyone trying to claim x amount x 52 for collecting rent will fall foul of Revenue if audited, according to him.

I have to visit my property from time to time for repairs etc. and my accountant told me to put through at least 2 petrol receipts per year to cover these legitimate visits. I also keep a log of all visits and the mileage incurred for each visit, which I can back up with dated tradesmen's receipts.

And, according to Mandelbrot in a previous discission on this subject here
Click to expand...

Just because I say something doesn't mean I'm right!!

Section.97(2) TCA 1997 sets out the deductions that a taxpayer can take against rental receipts.

S.97(3) states that the amount of deduction authorised by Subsection 2, is the amount you'd deduct if the receipt of rent were deemed to be a trade carried on by the landlord - I got hung up on this point the last time round, and failed to recognise something important... that S.97(2) doesn't contain the wholly and exclusively test that applies to trade deductions, so it is only the deductions specifically authorised that can be taken.

S.97(2)(d) states "the cost of maintenance, repairs, insurance and management of the premises borne by the person chargeable and relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received, not being an expense of a capital nature"

The way net rental income is calculated (under S.97(1)) treats each property as a separate business, and the surplus or deficit from each property is then aggregated.

The entitlement to a deduction for motor expenses in a trade situation derives from the fact that you operate from a place of business - in the case of many sole traders this is their home. In the case of a letting of property however, there is no trade, and there is no place of business other than the property subject to the particular letting.

As the property is the place of business, it follows that you cannot take a deduction for what is a private cost to you, of getting to/from the property...

I'm pretty sure I'm right this time.
 
Damn, was just about to include my flights home from Germany last year in my tax return :-( Ah well. Interestingly if I lived in Ireland (or anywhere) and flew to Germany once a year to "inspect" my rental property here, I would be allowed the deduction by the German tax office.
 
So in conclusion are generally agreed that motor expenses are not allowed in a rental income computation.

Just to clarify the point.
 
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