At a glance 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'.

The allowances are separate: one 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. You then may elect to deduct the £1,000 allowance if that is more beneficial than claiming tax relief for your actual 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 the actual cost? 

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