SJB & Co Chartered Accountants

Property tax issues and checklists


  • As Making Tax Digital is now just 2 years away, it is time to start preparations if you have not already done so. Landlords whose rental and self-employed income exceeds £10,000 per year will have to comply with the MTD rules. Note that it is gross income (turnover) that is relevant for MTD and not profits. MTD will require landlords to keep electronic records and make quarterly returns in addition to the year-end return. We will be discussing with landlord clients how they can best satisfy the requirements of MTD over the next couple of months. The first initial step is to set up a separate bank account purely for the rental business as this will simplify record keeping.
  • Review any replacement furniture and equipment to ensure you will qualify for the replacement furniture relief (RFR). Remember, if you sold the replaced item(s) you must deduct any proceeds of sale when calculating your entitlement to RFR. This relief only applies to the replacement of existing items not the purchase of new items.
  • If you are buying a buy-to-let residential property, consider allocating a nominal amount in the contract for any second hand furniture left in the property. In this way, if you subsequently replace the furniture, you can write off all the expenditure under the RFR. If you do not allocate sums in the contract you will have no legal claim to the furniture and you will not be able to claim RFR when you replace it. This strategy will also save you Stamp Duty Land Tax (Land & Building Transaction Tax in Scotland and the Welsh Land Transaction Tax) as this is not applied to the cost of furniture.
  • Make sure that you amend your Will if you have acquired or disposed of rental properties since your last review.
  • Transfers of property (or a part interest) between spouses are generally free of CGT and IHT charges. This may enable you to direct rental profits into the hands of the spouse taxed at lower rates. Planning is key as in certain circumstances this may trigger a stamp duty charge.


Documents that you need to maintain, most of these are required by legislation, so penalties may apply if you don’t comply:

  • Building and landlord insurance
  • Gas Safety Certificates
  • Energy Performance Certificates
  • Electrical Installation Reports and Certificates
  • Smoke detectors on each floor
  • Carbon monoxide detectors if required
  • Copies of tenants references
  • Tenants agreement to receive communications by email
  • Proof that tenant has right to rent in the UK (copy passport for example)
  • Household inventory
  • Register your property business with HMRC
  • Tenants contact details
  • Protect deposit within 30 days of receipt
  • You are required to respond to written complaints within 14 days of receipt, in writing
  • Inform tenants prior to a property inspection

Documents that you should provide a tenant with:

  • How to Rent – the checklist for renting in England
  • Guarantors Agreement – if required
  • Assured Shorthold Tenancy Agreement
  • Information regarding Deposit Protection Scheme
  • Serve the correct form of notice to end tenancy
  • Tenant should sign a list of deductions made from rent deposits
  • Return whole or balance of deposit at end of tenancy

Many landlords use the services of letting agencies who should ensure that you are compliant…

For more information or to discuss any issues raised above please contact Simon Bell by phone on 01376 571358 or email [email protected] .

This article is written in general terms and therefore cannot be relied on to cover specific situations; applications of the principles set out will depend on the particular circumstances involved and it is recommended that you take professional advice before acting or refraining from acting on any material in the newsletter.


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