BN 50 - Landlord's Energy Saving Allowance

Who is likely to be affected?

  1. Individual landlords (and other landlords who pay income tax) who let residential property.

General description of the measure

  1. The scope of the Landlord’s Energy Saving Allowance (LESA) will be extended to include draught proofing and insulation for hot water systems.

Operative date

  1. Will have effect from 6 April 2006.

Current law and proposed revisions

  1. Under section 312, Income Tax (Trading and Other Income) Act 2005 (ITTOIA), landlords who pay income tax may claim a deduction, the LESA, against profits for expenditure to install loft insulation or cavity wall insulation in a dwelling house which they let. This was extended to cover solid wall insulation in regulations made in 2005 (the Energy-Saving Items Regulations 2005 – Statutory Instrument 2005/1114). The maximum amount which may be claimed is limited to £1,500 per building.
  2. Regulations will be made under section 312(5)(c) ITTOIA to enable landlords to claim the allowance for expenditure to draught proof and install insulation for hot water systems in dwelling houses which they let.

Further advice

  1. If you have any questions about this change, please contact your local HM Revenue and Customs Enquiry Centre (see the telephone directory for details).