Sarah Bradford explains the nature of the property allowance and explores the limitations on its use.
The property allowance is something of an easement in that it removes the need for individuals to report small amounts of income from property – and saves HMRC from having to collect small amounts of tax where the costs of collection outweigh the tax collected.
The property allowance (along with its counterpart, the trading allowance) was introduced with effect from the 2017/18 tax year. It was initially set at £1,000, and has remained at this level ever since.
An individual is only entitled to one property allowance each year, regardless of the number of sources of property income they have.
Nature of the allowance
Where ‘relevant property income’ from all sources is less than £1,000, it can be enjoyed tax-free
