Expert Advice

Energy Saving Allowance can be claimed by individual landlords who let residential properties and pay income tax, or corporate landlords who let residential properties and pay corporation tax.

Normally landlords cannot make any deductions for capital expenditure when calculating profit and loss of their rental business. However, they may claim an income tax allowance on expenditure they incur in relation to installing the following in residential dwellings:

• Loft insulation
• Cavity wall insulation
• Hot water system installation
• Draught proofing
• Solid wall insulation
• Floor insulation

The expenditure needs to have been incurred before 6 April 2015 for landlords to be eligible for the allowance scheme.

For new landlords, the deduction is available for expenditure incurred up to six months before the letting business commenced.

The maximum deduction is £1,500 per dwelling per tax year. It should be noted that the deduction is per dwelling so if four flats are owned in one block the maximum allowance would be £6,000.

Shaw Gibbs have considerable experience in looking after the tax affairs of landlords. scottfraser are delighted to offer our landlords a free consultation with a member of the Shaw Gibbs team for information on the Energy Saving Allowance Scheme or for Tax Advice.

More factsheets are available in the Tax Matters section of our website.