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Sir,
When water rates are paid for a period less than 12months, example if the question says paid water rate for the period 1 July 2014 to 5 April 2015, are we to prorate to get the amount to deduct from rent received or we apply the bulk amount.
Rent a room relief applies when a room is let our Furnished from one’s residential building. Are there instances where a room is let our unfurnished. Will rent a room relief still apply?
Property income is assessed on an accruals basis not a cash basis so we must compute the rental income accrued in the tax year less the expenditure incurred in that tax year irrespective of how much may have been received or paid. Look at how the insurance deduction is computed in example 2 (Sid) in chapter 3 of the OT course notes and follow that technique for all expenditure incurred, such as the water rates.
Rent a room relief applies to furnished accommodation.within the taxpayer’s main residence.
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