I am a Limited Company owner and I charge rent to my limited company for a property that I own personally, can I claim Property Allowance on my Self-Assessment Tax Return?
The Property Allowance was first introduced in 2017, set at £1,000 a year of tax-free allowance to property owners and landlords.
The idea is that if you have an annual gross rental income of £1,000 or more, you may be able to apply for the Property Allowance tax relief, instead of claiming as an expense, via your Self-Assessment Tax Return.
If you jointly own a property, you can claim up to £1,000 tax relief on your share of the rental income and cannot claim any other rental income expense in the same year. You do have the option to change your approach year-on-year depending on the level of rental income you receive.
Am I eligible to claim for the Property Allowance?
If you own a limited company and charge rent to the company, unfortunately this is one scenario where you cannot claim for the Property Allowance.
Other scenarios where you cannot claim the Property Allowance are:
- If the property income you receive is from a partnership where you or someone connected to you are partners
- If the property income you receive is from your employer or the employer of your spouse of civil partner
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Written by Shaima Todd.