Property Rental Income for Individuals
UK Rents and licence’s are regarded as UK land and property. Land and property income is all income deriving from such property as if it were a trade. Therefore this is calculated as all income being assessed in the tax year on an “accruals” basis. This means that income is taxed on an “arising” basis in the year of assessment, i.e. income that is due in the year, and not necessary income that is actually paid by the tenant.
For example if a tenant per the tenancy agreement is obliged to pay 495 a month, the taxable income is 5,940 a year, irrespective of the fact the tenant might say pay late for their rent.
Since rental income is an assessment like trade, all income from the different rental properties are pooled together, creating one income stream. Hence profits and losses of the same UK properties are amalgamated together to create the net profit or loss. In essence losses from one property is netted off against profits of the other.
If they are losses overall after pooling all the properties together, then these losses can be carried forward against future profits of...
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