Further to past editions of S & W Insight, and as announced in the May budget, travel deductions claimed on rental properties are now denied.
The new law governing this denial was passed on 15 November 2017 with effect from 1 July 2017. The law effectively denies most owners of residential properties deductions for travel expenses related to their properties. The law is quite wide in its scope and covers travel for all purposes including for the purpose of inspecting, maintaining and collecting rent, as well as undertaking repairs and maintenance to the property.
The expenses can then not be capitalised into the cost of the property either. The expenses are disregarded altogether.
This law is relevant to properties that are being used by the tenant as a place to live. Travel expenses will still be available where the property is being used by the tenant for business purposes (eg full or part use as commercial premises). Additionally you can still employ parties to carry out tasks on your behalf (such as real estate agents for carrying out property management, inspections etc).
If you have any queries in this regard don’t hesitate to contact us to discuss.
Kreston Stanley Williamson Team
*Correct as of November 2017
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.