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Self assessment: Property income

  • Associate PM.Dip
  • Practice Licence
  • 3 posts
  • # 117419

Hello all,

A client has moved and has been renting out what was previously the family home. There were a number of repairs undertaken to the property in the last tax year and when I input the property income and expenditure figures into the client's tax return HMRC flags up the following:

  "WARNING: This figure is high in relation to 'Total rents and other income from property'. Read Help"

I was wondering if anyone knows what the implications of this are? E.g. is it more likely that HMRC may ask for more information or carry out a tax investigation on the client (not something I've experienced previously!)

In line with HMRC guidance, expenditure that was restoring to the original condition has been treated as allowable, whereas anything which has improved the property, or provided something new has not been included, so to the best of my understanding the expenditure is legitimate. 

Many thanks,

Sally

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