CT600 for Property Companies: Complete Guide
Property companies have unique tax considerations when filing their CT600. This guide covers everything from rental income treatment to capital allowances for landlord companies.
Property Company Basics
Trading vs Investment Company
First, understand how HMRC views your property company:
| Type | Activity | Tax Treatment |
|---|---|---|
| Property investment | Letting property | Property income (not trading) |
| Property trading | Buying/selling property | Trading income |
| Mixed | Both activities | Split treatment |
Why This Matters
Property investment income goes in different boxes than trading income:
| Activity | CT600 Box | Description |
|---|---|---|
| Trading | Box 165 | Trading profits |
| Property letting | Box 190 | Property business income |
| Both | Both boxes | Split accordingly |
CT600 Boxes for Property Companies
Key Boxes to Complete
| Box | Description | Property Company Usage |
|---|---|---|
| 190 | Income from UK property business | Main rental income |
| 195 | Non-trading gains on intangibles | Usually blank |
| 205 | Other income | Interest received, etc. |
| 210 | Chargeable gains | If property sold |
| 315 | Capital allowances | On fixtures, equipment |
Box 190: Property Income
Enter your net property income in Box 190:
``` Rental income received
- Allowable property expenses
Allowable Property Expenses
Fully Deductible Expenses
| Expense | Notes |
|---|---|
| Letting agent fees | Management and finding tenants |
| Insurance | Buildings and landlord insurance |
| Repairs and maintenance | Like-for-like repairs only |
| Council tax (void periods) | When paying between tenants |
| Utilities (void periods) | Gas, electric when empty |
| Legal fees for tenancy | Lease preparation, disputes |
| Accountancy fees | For property accounts |
| Ground rent | If leasehold property |
| Service charges | Maintenance charges |
| Advertising | Finding tenants |
Partially Deductible
| Expense | Treatment |
|---|---|
| Mortgage interest | 100% deductible for companies |
| Vehicle costs | Business proportion only |
| Home office | If managing from home, business proportion |
Not Deductible
| Expense | Why |
|---|---|
| Property purchase costs | Capital, not revenue |
| Improvements | Capital, claim allowances instead |
| Personal expenses | Not business related |
| Depreciation | Claim capital allowances instead |
Mortgage Interest for Companies
Unlike personal landlords, companies get full relief on mortgage interest:
| Ownership Type | Interest Relief |
|---|---|
| Personal landlord | Restricted to 20% credit |
| Limited company | 100% deductible expense |
Example:
- Rental income: £24,000
- Mortgage interest: £8,000
- Other expenses: £4,000
- Taxable profit: £12,000
Capital Allowances
What Qualifies
Property companies can claim capital allowances on:
| Item | Allowance | Notes |
|---|---|---|
| Furniture (furnished lets) | AIA or WDA | Not available for residential after Apr 2016 |
| Fixtures integral to building | Integral features | Lifts, electrical systems |
| Office equipment | AIA | Computers, office furniture |
| Vehicles | WDA | Vans for maintenance |
| Tools and equipment | AIA | Maintenance tools |
Residential vs Commercial
| Property Type | Capital Allowances Available |
|---|---|
| Residential (Buy-to-let) | Limited - mainly office equipment |
| Commercial | Full range including fixtures |
| Furnished holiday lets | Treated as trading, more allowances |
Replacement of Domestic Items Relief
For unfurnished residential lets (instead of Wear & Tear):
| Item | Treatment |
|---|---|
| Furniture | Deduct cost of replacement |
| White goods | Deduct cost of replacement |
| Carpets | Deduct cost of replacement |
| Curtains | Deduct cost of replacement |
Repairs vs Improvements
The Key Distinction
| Type | Tax Treatment | Example |
|---|---|---|
| Repair | Fully deductible expense | Fixing broken boiler |
| Improvement | Capital (no deduction) | Replacing single glazing with double |
| Replacement | Usually deductible | Like-for-like kitchen replacement |
Grey Areas
Kitchens and Bathrooms:
- Same standard replacement: Repair (deductible)
- Upgrade to higher spec: Improvement (capital)
- First installation in new property: Capital
- Patching existing roof: Repair
- Replacing entire roof (same spec): Usually repair
- Adding insulation: Improvement
Furnished Holiday Lettings
FHLs have special treatment:
| Benefit | Detail |
|---|---|
| Treated as trading | Goes in Box 165 |
| Capital allowances | Full range available |
| Pension contributions | Based on relevant earnings |
| CGT reliefs | Business asset disposal relief available |
FHL Conditions
Must meet all of:
- Available for letting 210+ days/year
- Actually let 105+ days/year
- No single letting over 31 consecutive days (for 155+ days)
Property Sales and Gains
When selling property:
| Aspect | CT600 Treatment |
|---|---|
| Gain on sale | Box 210 (Chargeable gains) |
| Loss on sale | Against gains, then carried forward |
| Base cost | Original purchase plus capital improvements |
| Indexation | Available up to December 2017 |
- Purchase cost
- Acquisition costs (stamp duty, legal)
- Capital improvements
- Indexation allowance (to Dec 2017)
Multiple Properties
If your company owns several properties:
Pool All Property Income
All rental income goes into one Box 190 calculation:
``` Property 1 rent: £12,000 Property 2 rent: £15,000 Property 3 rent: £18,000 Total rent: £45,000 Less: All expenses: (£20,000) Box 190: £25,000 ```
Loss on One Property
Losses from one property offset profits from others:
``` Property 1 profit: £8,000 Property 2 loss: (£3,000) Net Box 190: £5,000 ```
Common Mistakes
1. Wrong Box for Rental Income
Wrong: Putting rent in Box 165 (trading) Right: Use Box 190 for property investment income
2. Claiming Improvements as Repairs
Wrong: Deducting cost of new extension Right: Improvements are capital - no direct deduction
3. Forgetting Mortgage Interest
Wrong: Not claiming full interest deduction Right: Companies get 100% relief on mortgage interest
4. Missing Replacement Relief
Wrong: No deduction for replacing white goods Right: Claim Replacement of Domestic Items Relief
Using TinyTax
TinyTax handles property company CT600s:
- Enter rental income and expenses
- We identify what's deductible
- Mortgage interest fully deducted
- Capital allowances calculated
- Correct boxes populated automatically
Verification Checklist
Before submitting, verify:
- Rental income in Box 190 (not 165)
- Mortgage interest fully deducted
- Repairs vs improvements correctly classified
- Capital allowances claimed where available
- Replacement relief claimed if applicable
- All properties included
- Property sales in chargeable gains section
TinyTax handles property company CT600s with the correct treatment for rental income. Start your filing