LANDLORDS are entitled to claim any expenses they incur as a tax deduction against the rent they collect assuming of course that they are declaring the rent on their annual income tax self assessment return.

Mr B is from the Midlands and lives in the family home which his late father left to himself and his two brothers in trust. The property is to be inherited in full by the surviving brother but our reader was assured of a lifetime's occupancy.

He recently took out a credit union loan to fix up the house and then took in two lodgers. What he is not sure about is what repairs and costs he can claim against his income tax bill. "I pay all the out goings including light, heat, service charges, television licence, cable, rubbish disposal, etc. Will the expenses be allowed on a pro rata basis or will they be allowable at all?"

We contacted Sebastian Devlin of the Taxation Advice Bureau in Dublin about Mr B's position.

"Exactly how much your reader can claim in tax relief on expenses incurred as a landlord is a bit of a grey area since it comes down to what his tax inspector would consider to be reasonable. Income tax is a self assessment tax so he must decide for himself what to claim and what not to and he must convince the tax inspector that the expenses are legitimate and reasonable.

"I'd say from this case that he would probably get two thirds relief for all the expenses he listed, including heat and light and TV licence if he can show that he is paying all these bills. Whatever is left after deducting this from the rental income is then assessed as his profit and is liable to income tax."

The interest Mr B is paying foil his credit union loan is also tax deductible. "Something his lodgers may not know," Mr Devlin adds, "is that they are allowed to claim £500 worth of tax relief each for being private accommodation tenants. Widowed people get £750 and married couples £1,000." If either of the lodgers is over age 55 they get double the relief £1,000 (£1,500 for a widow(er) and £2,000 for a married couple.)

If the Revenue Commissioners deny any of his expense claims, Mr B has the right to appeal their decision to the Appeal Commissioners, says Mr Devlin.