A client receives rental income of £6K pa and is entitled to claim the expense allowance of £1K. The client pays an insurance premium for the property which is recoverable in full from the tenant. There is therefore no "net" expense incurred. However, should the cost still be considered to have been part of the £1K expense allowance being claimed and the amount recovered disclosed as additional income or can the whole transaction be ignored? The net effect is clearly that the insurance cost may, or may not, be taxable.