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Sam
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Category: Tax
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A UK Ltd is going to buy a freehold property and will

Resolved Question:

A UK Ltd is going to buy a freehold property and will receive rent as income, I haven't understand the rate of depreciation (if exists) and if the rent income will be taxable gross or net after deducting other expenses e.g legal fees or even deprceciation
Thanks in advance
Submitted: 10 months ago.
Category: Tax
Expert:  Sam replied 10 months ago.

Hi

Thanks for your question

A limited company cannot just hold a rental property - there has to be a trade involved (so perhaps its a B&B or a Hotel or commercial property)

So assuming you have a trade then you just declare the rental income less costs to earn this rent - so mainternace, or insurances etc (day to day costs)

Any legal fees associated with the purchase is used when the property is sold to reduce the capital gain (or corporation tax) and there is no depreciation or indexation anymore - this was abolished when the lower capital gain rates were introduced but there is consideration when the business is selling an asset - is this what you mean?

Thanks

Sam

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