Are you able to 'negative gear' property in the UK?

Question

i.e. offset tax with the costs in an investment flat - if I pay tax on a £30,000 income and then an investment flat costs £10,000 to upkeep it counts as a negative investment and therefore you only pay tax on an income of £20,000.

Answer 1

With a property your rent out you can choose at the beginning either to claim 10% of the income for it for maintenance, without any further paperwork, or the actual money you spend on it (maintenance, not improvement). You cannot change after you make the initial choice. The maintenance does reduce your tax bill, but only the tax you receive from the property - not from your job.

Answer 2

In a word, No.
Negative Gearing is an Australian term and concept, meaning that the negative income (i.e. interest cost of buying and costs of maintaining a rental property being greater than the rental income) can be offset against positive income as an employee.
It doesn't work like that in the UK where there are Tax Schedules of income. Schedule E being earnings as an employee, Schedule F being (I think) Furnished rentals, then there's another schedule for unfurnished rentals etc and you can only offset costs and income within the same schedule

Answer 3

Assuming that the income you speak of is not from rental properties, the answer to your question is no. The revenue costs of upkeep (i.e. not capital - which would rule out the capital part of any mortgage repayments) of an investment flat can only be deducted from rental income. It the expenses exceed the income the resulting loss is carried forward against future rental profits. Note that all rental properties can are lumped together as one business.

The 10% expenses mentioned elsewhere specifically relate to the fixtures and fittings only in a furnished rental property. i.e. cookers, fridges, furniture. You can either claim the expenses for these items as you replace them (not when first bought) or claim the 10% wear and tear allowance. General expenses like mortgage interest, utility bills, repairs etc are all allowable.

Answer 4

If the flat is strictly an investment meaning that you don't live there and intend to sell it for profit then you can offset your expenses for improving it against capital gainst tax when you sell it.

If you rent out the flat then you can offset repairs and running costs but not improvements against the rental income.

If you buy it as a home then you don't pay capital gainst tax when you sell it but it must be your only or main residence and you have cannot offset your improvement costs against capital gains tax as there is none to pay and your running costs cannot be offset because they are the cost of living we call have to pay.