Personal Tax - Green Light question error?

RosieCarlisle

Hello!

My Personal Tax exam (AQ2013) is tomorrow and I'm working through the Green Light tests.

I got one question wrong on the Property Income topic (question reference: 5595), but I just wanted to double check the answer because it's different to how I've been learning this topic. The question is:

Alan owns two houses, which he rents out to tenants.

House A is let at £1,500 per month and was let for the whole of 2016/17. House B is let at £750 per month.

The tenants for House B moved in on 1 October 2016 but moved out suddenly in the beginning of March owing the rent for January, February and March.

What is the taxable rental income for 2016/17?

The answer is apparently £20,250, but this doesn't seem to take the accruals basis of property income into account? The tenants for House B haven't yet paid the rent for January, February and March, but shouldn't this rent still be included in the tax computation?

AlisonSwanson

You only accrue for rent receivable if it is likely to be received. This question suggests that the tenants have done a runner, in which case the 3 months rent can be written off.

RosieCarlisle

Thanks for your answer. Would this count as a deductible bad debt, then, even if it's not specifically stated as such?