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?

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.

Good morning, in example 2, why wasn’t the “construction of garage, replacing the car port” included in the calculation? It is in the current tax year or no?

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.

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.

Ok.sana says

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

mcnugget says

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.

scorpion716 says

Miss Jill simply your are queen

boyemaggie says

Good morning, in example 2, why wasn’t the “construction of garage, replacing the car port” included in the calculation? It is in the current tax year or no?

IMULLA says

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.

Georgiana says

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!

boyemaggie says

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.

NakiP says

Remember it said that the tenants did not pay the March installment until the next tax year. Therefore, it was not included in the calculation.