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Didn't declare tax on rental income
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# 21
hungary97
Old 01-03-2007, 7:20 PM
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not that im trying to sell my prefession but this is where your friendly accountatn is needed.

Some repairs renewals are deductable against rental income some are not it depensa on the nature of each one and it is a very grey area when i was in the industry it was not uncommon for five of us t argue for two hours whether we thought someting was capital (CGT) or Revenue (income tax) deductable.
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# 22
brasso
Old 01-03-2007, 11:15 PM
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I didn't think to notify the IR for a couple of years in this situation, and had no problem. I didn't buy as BTL -- it was a flat I lived in for some years, then kept on after getting married and moving into my wife's house.

Although part of me was a little reluctant to tell the IR, I'm glad I did. Partly because the anxiety I felt about them finding out, just vanished overnight, and partly because it was much less expensive than I thought. There are loads of expenses you can claim against the income, and in fact I haven't had to pay anything yet to the IR because I've spent more on maintaining the property, servicing the legal requirements, and travelling to visit the property (we've ended up living a long way from it), than I've received in rent.

The IR have been helpful and even pleasant about it. Definitely tell them. If you don't, when they catch up with you, you'll wish you had!
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# 23
silvercar
Old 02-03-2007, 9:09 AM
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www.hmrc.gov.uk/findout links to information on registering for landlords.
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# 24
moneysavinghopeful
Old 26-01-2010, 8:43 AM
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Default what if I'm not making anything from renting my flat out - do I still have to pay tax

I've just read Saturday's money section in the Guardian and didn't realise previously I ought to pay tax on my flat rental income if I wasn't profiting from it, now I'm not sure.

I'm not a proper landlord, I just started renting out my flat when I moved in with my partner as I didn't want to sell it immediately.

I don't make a penny from renting it out, in fact once I've paid the mortgage and the the ground rent/ service charges, I'm actually out of pocket. Even more so if I have to do repairs etc.

Will I still have to pay tax even in this situation?

Thanks
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# 25
silvercar
Old 26-01-2010, 9:23 AM
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Quote:
Originally Posted by moneysavinghopeful View Post
I've just read Saturday's money section in the Guardian and didn't realise previously I ought to pay tax on my flat rental income if I wasn't profiting from it, now I'm not sure.

I'm not a proper landlord, I just started renting out my flat when I moved in with my partner as I didn't want to sell it immediately.

I don't make a penny from renting it out, in fact once I've paid the mortgage and the the ground rent/ service charges, I'm actually out of pocket. Even more so if I have to do repairs etc.

Will I still have to pay tax even in this situation?

Thanks
If the mortgage interest and other expenses exceeds the rental income then you will declare a loss on your tax return and carry that loss forward to future years. You can't put that loss against earned income but you can carry it forward until such a time as you would be making a profit.
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# 26
Cissi
Old 26-01-2010, 9:24 AM
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Quote:
Originally Posted by moneysavinghopeful View Post
I've just read Saturday's money section in the Guardian and didn't realise previously I ought to pay tax on my flat rental income if I wasn't profiting from it, now I'm not sure.

I'm not a proper landlord, I just started renting out my flat when I moved in with my partner as I didn't want to sell it immediately.

I don't make a penny from renting it out, in fact once I've paid the mortgage and the the ground rent/ service charges, I'm actually out of pocket. Even more so if I have to do repairs etc.

Will I still have to pay tax even in this situation?

Thanks
You still have to fill out a tax return, but if the rent doesn't cover the interest part of your mortgage, service charges and repair costs then there won't be any tax to pay. Any mortgage capital repayment would still be taxable though.
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# 27
pennine
Old 26-01-2010, 10:05 AM
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Is a hip pack classed as an allowable expense ? The only info I have found on allowable expenses seem to be out of date, before hips were introduced. I'm not sure if I needed a hip or EPC in place before I rented out my property ?
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# 28
ManicMum
Old 26-01-2010, 11:04 AM
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I've got 2 mates who don't declare and one has several properties. It makes me mad as I am honest but what can you do? Their lookout. One says they don't care and the other says they don't bother with such things. In all other ways they are decent people and their attitude does surprise me. There must be loads of people out there doing the same.
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# 29
moneysavinghopeful
Old 26-01-2010, 11:07 AM
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Thanks guys thats really helpful. I actually just gave them a ring and they said if the profit I make once I deduct interest payments and service charges etc. from the rent doesn't exceed 2500 then I just have to write to them with a few details - no forms to be completed.

I probably just make a profit if the repayment part of the mortgage is taken away, but definitely not enough to exceed this figure - so I'm going to do as they suggested.

It's good to know I'm doing the right thing by the law but not getting stung when I'm not profiting!
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# 30
Fire Fox
Old 26-01-2010, 11:08 AM
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Quote:
Originally Posted by moneysavinghopeful View Post
I've just read Saturday's money section in the Guardian and didn't realise previously I ought to pay tax on my flat rental income if I wasn't profiting from it, now I'm not sure.

I'm not a proper landlord, I just started renting out my flat when I moved in with my partner as I didn't want to sell it immediately.

I don't make a penny from renting it out, in fact once I've paid the mortgage and the the ground rent/ service charges, I'm actually out of pocket. Even more so if I have to do repairs etc.

Will I still have to pay tax even in this situation?

Thanks
You need to register for income tax even if you don't actually pay any. If you are letting your flat you are a proper landlord in the eyes of the law, this means your tenants have rights and you have responsibilities towards them. I hope you have all the right safety certificates in place, the damage deposit is lodged in a scheme, you have landlord's insurance and consent to lease from your lender?
What a difference a day makes, twenty four little hours.
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# 31
N79
Old 26-01-2010, 11:11 AM
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Quote:
Originally Posted by moneysavinghopeful View Post
I'm not a proper landlord, I just started renting out my flat when I moved in with my partner as I didn't want to sell it immediately.
Can I just take exception to this statement? You are a "proper" LL.
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# 32
moneysavinghopeful
Old 26-01-2010, 11:21 AM
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Yes I am a proper landlord - I'm not flakey and I've done all the right things with deposits, safety certificates, insurance, my lender etc. and my tenants say I'm the best they ever had. I'm completely kosher I just didn't know about this one thing.

When I said I wasn't a proper landlord, I meant I wasn't in it for the money but through circumstances, so everyone can calm down now!
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# 33
mlz1413
Old 26-01-2010, 12:19 PM
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[QUOTE=kungfumaster;4476674].. they say that I should have all receipts for the last 6 years, whereas I have hardly kept any of my receipts . .QUOTE]

Do you have a seperate bank account for the rental income & out goings? Can you prove any payments - ie cheque payments for repairs. Do you always use the same person to service the boiler - could they give you copy invoices?

The IR have offices you can turn up at and talk to someone, but they will probably be busy at this time of year - 31st Jan is deadline for self assessment tax returns.

Just noticed the dates... 2007 thread resurrected in 2010!

Last edited by mlz1413; 26-01-2010 at 12:22 PM.
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# 34
ManicMum
Old 26-01-2010, 12:48 PM
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Quote:
Originally Posted by moneysavinghopeful View Post
Thanks guys thats really helpful. I actually just gave them a ring and they said if the profit I make once I deduct interest payments and service charges etc. from the rent doesn't exceed 2500 then I just have to write to them with a few details - no forms to be complete!
Can I just confirm this with anyone else? My husband and I have to do a tax return every year. We have never made over 2500 when all the interest, expenses etc taken off so why are we doing tax returns? My hubby is employed and although self employed last couple of years, I wasn't working before that. We don't have any other investments or anything.

cheeers
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# 35
RobertoMoir
Old 26-01-2010, 12:49 PM
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Quote:
Originally Posted by Matt1069 View Post
Is there an amount I'm allowed to make before i have to start paying tax, as a brand new LL (exchanged contracts with my new tenants last week) myself thats employed, I'll admit I'm not making that much profit at all per month, its pure long term investment for me, just wondered if theres an allowance per year, after maintenance that'll no doubt start soon, i prob won't be making anything, i assume I'll still have to prove/declare it but was just wondering about any allowance?

Thanks
You have to declare all income. You can offset the costs against the income to make a saving on your tax liability but you should declare all sources of income to the taxman.
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# 36
Trollfever
Old 26-01-2010, 1:19 PM
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Question #4 on my just completed online Self Assessment tax return reads:

UK Property - Did you receive any income from UK property (including rents and other income from land you own or lease out)?



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# 37
mr_fishbulb
Old 26-01-2010, 1:20 PM
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Quote:
Originally Posted by ManicMum View Post
I've got 2 mates who don't declare and one has several properties. It makes me mad as I am honest but what can you do?
Errrrrrr, dob 'em in?
I wish I could invest in taxes - they're the only thing guaranteed to go up.
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# 38
clutton
Old 26-01-2010, 1:24 PM
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IR150 Taxation of REnts... this is an excellent read explaining all the expenses oyu can claim
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# 39
ManicMum
Old 26-01-2010, 3:01 PM
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Quote:
Originally Posted by mr_fishbulb View Post
Errrrrrr, dob 'em in?
easier said than done. Part of me wants to but not sure I could not look guilty when they tell me someone has dobbed them in. Sure it will catch up with them eventually.
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# 40
mr_fishbulb
Old 26-01-2010, 3:15 PM
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Quote:
Originally Posted by ManicMum View Post
easier said than done. Part of me wants to but not sure I could not look guilty when they tell me someone has dobbed them in. Sure it will catch up with them eventually.
You're too nice
I wish I could invest in taxes - they're the only thing guaranteed to go up.
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