Sorry if this is a simple question, but i'm struggling to understand the exact definition of net rent.
Say I received rents from a client of £10,000 and deducted expenses of say insurance, repairs, solicitors etc of £5,000. would my net rent therefore be £5,000.
But, what if I invested £2000 that year on improving a property, say say a new bathroom. would this also be deducted from recieved rents to give a net rent of £3000.
The reason is, that im wondering for reasons of applying the 10% wear and tear allowance, as this is applied to net rent.
Thanks Rob, I can understand that costs like utilities and council tax would be deducted from gross rent when paid by a landlord to give net rent. What about costs like letting agents fees or general admin costs in running a property income business?
I think my confusion is in interpreting what HMRC state. They say net rent is gross rent less costs incurred that would normally be borne by the tenant. Does this mean that utilities and council tax would count but costs like letting fees wouldnt?
Just the utilities and council tax really. Normally the landlord would be expected to pay for repairs, letting fees etc whereas the tenant should pay their own water rates, council tax.
