If you have a portfolio of properties and incur expenses then it may not be possible to attribute the cost to a single property. This is because the expenditure may have been for all of the properties.

A good example of this is when purchasing decorating materials for a property. In such circumstances you can either:

• apportion the cost against the properties, or
• have a separate listing of generic expenses to add on at the end when you combine all the incomes and expenditures.

Either way is fine, as it makes no difference to the tax position, though practically the latter option may be easier and simpler to implement.

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This is a grey area as far as taxation goes.

The rules for pre-trading expenditure are quite complex, but in theory you can claim expenses incurred in the seven years before commencement of the rental ‘business.

The expenses are treated as incurred on the first day the rental business starts.

Having said that, HMRC will want to examine these expenses closely with a view to establishing whether they were incurred ‘wholly and exclusively‘ for the purposes of the ‘trade.’
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There is no principal private residence relief available to an owner if he doesn’t live in the property, but his relatives do.

However, if someone owned a property on 5 April 1988 that has been continuously occupied rent-free by a dependant relative since that date, the property is exempt from CGT when the owner disposes of it.
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