Landlords Energy Saving Allowance
If you are a landlord and make energy saving improvements to your property, you could reduce the tax you pay. You can do this by claiming the Landlords Energy Saving Allowance (LESA). Find out if you are eligible, what the allowance covers and how to apply for it.
Who can claim LESA?
You can claim LESA if you are a landlord renting out residential property and are either:
an individual landlord someone who pays income tax on profits from letting
a corporate landlord someone whose rental business is registered as a company and you pay corporation tax on profits from letting
However, you cant claim if you are a landlord:
claiming an allowance under the Rent a Room scheme
of a property rented out as furnished holiday accommodation
The Rent a Room scheme (money, tax and benefits section)
LESA – how much is it and what does it cover?
LESA is a tax allowance (not a cash payment) that allows you to claim up to 1,500 against tax every year. This allowance can be claimed for properties you rent out in the UK and abroad. You can claim LESA for the costs of buying and installing certain energy saving products for properties you rent out, but only for what you actually spend.
You can claim LESA for what you have spent on:
cavity wall and loft insulation, after 6 April 2004
solid wall insulation, after 7 April 2005
draught proofing and hot water system insulation, after 6 April 2006
floor insulation, after 6 April 2007
You can claim LESA up to 1 April 2015, when the availability of this allowance will end.
When was the allowance available from?
Individual landlords have been able to claim the allowance since 6 April 2004 – for corporate landlords its been available since 8 July 2008.
How to apply for LESA
You claim the allowance when filling in your tax return.
If you are an individual landlord, you claim the allowance when you fill in your self assessment tax return. Youll need to fill in the costs of buying and installing the energy saving products in the Landlords Energy Savings Allowance box on:
the UK property pages – if your property is in the UK
the foreign pages under the section Income from land and property abroad – if your property is outside the UK
The amount you enter on the form is claimed against your taxable profits from renting out your property. This means when you fill in your tax return you deduct the amount you are claiming for this allowance from your income. This reduces the amount of tax you pay for the year.
Fill in your self assessment form online
You can fill in your self assessment form online – find out about the advantages of doing this and how to complete a form by following the link below.
Understanding and using Self Assessment Online (money, tax and benefits section)
Or you can go straight to the form and fill it in on the HM Revenue and Customs (HMRC) website.
If you are a corporate landlord, you can claim LESA under allowable business expenses on your corporation tax return form. You should go to business.link.gov.uk, a website providing advice for businesses, if you want detailed advice on how to fill in your corporation tax return.
Claiming LESA on other energy saving products
LESA can’t be claimed on any energy saving products other than those listedin the section above: LESA how much is it and what does it cover? However, you could be entitled to other tax deductions if you are improving the energy efficiency of your property. This could apply to installing double glazing or more efficient hot water boilers that may fall under the category of repairs.
Can you claim LESA for more than one property?
Since 6 April 2007, its been possible to claim a maximum allowance of 1,500 for each house, flat or bed-sit you rent out. For example, if you rent out a building that contains four flats, you can claim up to 1,500 for each flat. Previously, the maximum allowance was 1,500 for the whole building.
Can more than one landlord claim LESA for the same property?
If a house, flat or bed-sit is owned by more than one landlord, they can claim a share of the allowance either in proportion to:
their ownership of the property
the moneythey have spent on buying and installing the energy saving products
Claiming LESA for installing energy saving products yourself
If you install the energy saving products yourself, you can claim LESA for the costs of buying the products. However, you cant claim LESA for your own labour and time for putting them in.
Contact your local tax office about LESA
If you have further questions about LESA, contact your local HMRC tax office.
Saving energy and money in your property
By making energy saving changes to your property, you can help reduce carbon emissions and also save money.
Saving energy in your home (environment and greener living section)
If you want to make other energy saving improvements to your property, you may also be eligible for grants from public funds, your local council or energy supply company.
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