An at a glance freeview guide. Subscribers see here for the full guide.

From 6 April 2017 individuals have benefitted from two new annual tax allowances of £1,000, the 'Trading and Property Allowances'.

There is one allowance for trading or miscellaneous income, and one for property income.

Key features

  • If relevant income does not exceed the £1,000 allowance there is no need to register for Self-Assessment and declare or pay tax on that income.
  • If relevant income exceeds the allowance, you must register for Self-Assessment and may elect to deduct the £1,000 allowance instead of claiming tax relief for allowable expenditure.
  • There is a separate election for each allowance by tax year.
  • Relief is excluded for certain types of income, business and in certain circumstances.

Trading allowance

  • You can claim the allowance for trading or other miscellaneous income and can choose how to allocate the allowance between the different income sources.
  • If you already have other taxable income from self-employment you cannot claim the trading allowance.
  • See Allowances: Trading and Property for how the allowance applies to partnerships.

Property allowance

  • If you have both UK and overseas property income; see Allowances: Trading and Property for how to allocate the allowance.
  • It does not apply to income on which Rent-a-room relief is given or where you claim expenses from letting a room in your own home, or to property income from a partnership.
  • Directors and employees who receive rent or an allowance for Working from home cannot claim the property allowance. 
  • Check the rules in Allowances: Trading and Property  if you are claiming a deduction for mortgage interest on residential property.

Links to our useful guides:

Allowances: Trading and Property
What are the trading and property allowances? Who can claim them? What are the restrictions?

Adviser guide: Property profits and losses
This guide should be read with our Property profit & losses tax toolkits: 

Flat (fixed) rate expenses or actual cost toolkit
What types of expenses can I use fixed rate expense deductions for? Which is better, fixed rate deductions or actual cost? 

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest.
Rate this post:
Attachments (0 / 3)
Share Your Location