PIM2205 - Deductions: main types of expense: rent paid out
The test for deductibility of rent is whether the rent in question is paid ‘wholly and exclusively’ for the purposes of the rental business (see PIM2010). Where a landlord lets part of a property and occupies the rest themselves, the proportion of the rent they pay which relates to the let part may be allowed as an expense of the rental business.
On the other hand, a landlord may have a property not all of which is let, but all of which is intended for letting. For example, in a house divided into flats, one flat maybe vacant for the time being. In such a case it may be accepted that all the rent is paid for the purposes of the rental business.
If part of the property is occupied by the landlord and part is let, an appropriate proportion of the rent may be allowed. A similar apportionment should be made of any ground rent, rent- charge, ground annual or feu duty.