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Click the links below to jump to a particular section:
How to claim 10% wear and tear allowance
How to Enter Tax which has been Deducted at Source
How to Claim Rent a Room Relief
How to enter Income from a Furnished Holiday Let
How to Offset Property Losses Against other Income
Wear and Tear Allowance has been abolished from 2017 and onwards. However, pre 2016 the following applies:
If the property is a furnished let, the client may be entitled to claim a 10% wear and tear allowance; this can be claimed as follows:
Log on to IRIS Personal Tax and select the client.
Click UK Land and Property then select Property Income.
Double-click on the address of the property located in the top half of the screen to the right.
Click the magnifying glass at the end of the Income Type field.
Select Furnished Let.
Tick Claim wear and tear allowance?
Click OK.
IRIS will automatically calculate the wear and tear allowance on the balance of the rent received after deducting expenses enter using expense type 1- council tax and water rates.
Gross rent received = £1000, type 1 expenses = £35.
Wear and tear allowance is calculated as follows £1000-£35= £965, 10%
of £965= £96.50 so £96.50 will be deducted as wear and tear allowance.
If tax has been deducted at source from the client land and property income this can be entered as follows:
Log on to IRIS Personal Tax and select the client.
Click UK Land and Property then select Property Income.
Click on the address of the property within the top half of the screen to the right.
Select the Income tab within the bottom half of the screen.
Double-click on the entry for the rent received, and enter the tax deducted in UK tax paid.
Click OK.
The tax entered here will be included in the
tax deducted at source figure shown on the tax computation report.
If the client has received income from letting furnished or unfurnished rooms in their own home they may be entitled to claim rent a room relief, this can be claimed within IRIS as follows:
Log on to IRIS Personal Tax and select the client.
Click UK Land and Property then select Property Income.
Double-click on the address of the property located in the top half of the screen to the right.
Click the magnifying glass at the end of the Income Type field.
Select Rent a Room Scheme.
Click Select.
If someone else is receiving income from letting accommodation in the same building and the client is therefore entitled to only claim half of the annual exempt amount tick the box within the Rent-a-Room dialogue.
Click OK.
IRIS will not automatically deduct the annual exempt amount from the income entered leaving the balance as taxable.
If the client received income from letting furnished holiday accommodation the income and expense details must be shown on the first page of the land and property supplementary section, this can be done as follows:
Log on to IRIS Personal Tax and select the client.
Click UK Land and Property then select Property Income.
Double-click on the address of the property located in the top half of the screen to the right.
Click the magnifying glass at the end of the income type field and select Holiday Let, Furnished.
The income and expenses entered for this property will then appear on the first page of the land and property supplementary section.
If the loss from property (other than furnished holiday lets) has arisen due to capital allowances the client may be entitled to offset this loss against the other income arising in the year, the loss can be offset within IRIS as follows:
Log on to IRIS Personal Tax and select the client.
Click UK Land and Property and select Property Losses.
Complete the Loss offset against total income box.
Click OK.
From 2012 onwards, if the loss arose from a furnished holiday let this can no longer be offset against other income. The loss arising in the year is carried forward to be used against future years’ profits.
If the full amount of the other property loss cannot be utilized IRIS will automatically carry the balance forwards until it can be utilized against property income arising within future years.