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Chapter 3 – Property Income and Investments – Individuals TX-UK FA2023

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  2. in Example 7, Property A.
    it says that the payment was received in advance quarterly. July 1, October 1, January 1, and April 1.
    so the payment received on April 1 will be next since we are calculating for the tax year of 1 April 2023/31 march 2024.
    I am assuming that we are using a cash base method.
    but the lecturer included the 1 April payment in this tax year.
    can someone explain to me how.

    • The tax year runs from 6th April to the following 5th April. Not 1st April to the following 31st March.
      So for the tax year 2023/24, this will be 6th April 2023 to 5th April 2024.
      Therefore the rent received on 1st April 2024 will be included in 2023/24 tax year.

  3. Hello for the insurance cost in question 3 , Please why was it not calculated pro-rata basis . since april – june 2023 fall under the 420 pounds payment and not all of the 480 pound is for 23/24 tax year.

  4. Hi,

    In example MCQ2, we were asked to find Gina’s taxable income, and it was highlighted that property income is her only income for the 2023/24 tax year. I’m wondering why we didn’t deduct the personal allowance to answer the question. Am I missing something?

    Thank you.

  5. Sorry to bother you! ‘If one or more
    persons do occupy the property for more than 31 consecutive days then these periods of long
    letting must not exceed 155 days in the year.’ Can you give example, please? Because it is kinda confusing, it is better to write 155 days instead of 31, isn’t it? We students get tricked by 31 and 155.

  6. Good afternoon.

    First of all – thank you so much for such a great explanation and your effort, Mrs Jill.

    In the Example 2 we have £9,600 annual rent. Tenant started to pay in July. I am struggling to understand why do we count 11 month of rent (July 23 – June 24) since tax year will end in April 2024? Could you help to understand this bit please?

    Many thanks <3

    Oksana

    • Heya, I believe it is 11 months because within that tax year 2023/24 we count rent covering 12 months (Apr 23 to Mar 24) no matter which tenant moved in. But a tenant missed out one month rent (Jun 23), so we have 11 months to take into account instead of full 12 months.

    • construction of the garage is considered a capital expenditure. It would have been an allowable expense if it was repairs to the carport or replacing the carport with a like-for-like replacement.

  9. Good evening. I am not sure I understand why the income for property B is only 2,500. The annual rent is payable quarterly in arrears, meaning that the rent for the quarters 2, 3 and 4 is received. Or maybe I am calculating t wrongly. Than you!

    • Rent for only 2 out of 4 quarters were received, that is 31st September and 31st December 2023, it would have been 3 if rent for 31 march 2024 was paid.
      Also, don’t forget that property B was paid in arrears, which is always paid at the end of the month, unlike payment in advance that happens on the first of every month.
      I hope you understand.

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