Rental income deduction/relief

ileven1225 · 21 January 2018 at 1:25PM

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 April. So I need to pay rental income tax between 01/04/2016 - 31/03/2017.

I am filling my selfaccessment form at the moment and would like to know what can be included as rental income deduction/relief for tax payment purpose. I listed the items i know:

service charge, lease hold
ground rent, lease hold
Mortgage - interest only
Any agency fee related, as it is managed by an agency.

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?

I need to work out all expenses to see if it is more than £7500 to decide if I need to use rent-a-room scheme.

Thanks eveyrone in advance!
Dawei

ACG · 21 January 2018 at 1:35PM

You can not declare the rent you pay elsewhere.

https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

Rent a room scheme would not be open to you as you are now an owner occupier. You do not occupy the property you rent out.

Cakeguts · 21 January 2018 at 1:40PM

Rent a room is for people who let a room in the house that they live in. You can't claim it for properties that you let where you don't live.

Thrugelmir · 21 January 2018 at 2:07PM

ileven1225 wrote: »

Can my monthly rental payment to another landlord be used to deduct my rental income?

No. This is not an expense incurred in letting the property out.

00ec25 · 21 January 2018 at 2:26PM

ileven1225 wrote: »

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 March. So I need to pay rental income tax between 01/04/2016 - 31/03/2017. the 16/17 tax year runs 6th April 2016 - 5th April 2017, you are required to declare your rental profits between those dates based on the cash received in that period (unless your total rent before deductions was >£15,000)

I am filling my selfaccessment form at the moment and would like to know what can be included as rental income deduction/relief for tax payment purpose. I listed the items i know:
service charge, lease hold allowed

ground rent, lease hold allowed

Mortgage - interest only allowed (but take care next year as the rules from 6 April 17 are different

Any agency fee related, as it is managed by an agency.

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?
not allowed, in no way shape or form is that a business related expense, anymore than the cost of your food you eat whilst living there is a business cost

I need to work out all expenses to see if it is more than £7500 to decide if I need to use rent-a-room scheme. how did you not notice that the rent a room allowance relates only to lodgers living in the same property as their landlord?

strange you missed this online!

it would be sensible for you to:
a) read the basics
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

b) take the HMRC online course on how to calculate your rental profits
http://www.hmrc.gov.uk/courses/syob3/new_letting/HTML/new_letting_menu.html

c) read the advanced stuff:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual

ileven1225 · 21 January 2018 at 10:15PM

Thanks everyone.

theartfullodger · 21 January 2018 at 11:18PM

ileven1225 wrote: »

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 March. So I need to pay rental income tax between 01/04/2016 - 31/03/2017. ....

You need to declare rent income from whenever if March 2016 & 05/04/2016 (you're late, there are fines...) and also 06/04/2016 & 05/04/2017 - you need to have done this by 31/01/2018 or there are fines.....

And will need to declare for 06/04/2017 & 05/04/2018 - you need to have done this by 31/01/2019

Cheers!

Mahsroh · 22 January 2018 at 9:32AM

theartfullodger wrote: »

You need to declare rent income from whenever if March 2016 & 05/04/2016 (you're late, there are fines...) and also 06/04/2016 & 05/04/2017 - you need to have done this by 31/01/2018 or there are fines.....

And will need to declare for 06/04/2017 & 05/04/2018 - you need to have done this by 31/01/2019

Cheers!

This! Was going to say exactly the same thing.

If you started generating income in March-16 then you'll need to do a tax return for 15/16 so I'd get on the phone to HMRC asap, as there will potentially* be a fine.

*I've made a similar mistake in the past where I didn't declare because my allowable expenses exceeded my rental income. When I declared to HRMC they asked me to do an historical tax return but also confirmed there would not be a fine. However, in my case, I didn't owe any tax for the year in question!

ileven1225 · 22 January 2018 at 11:20PM

Again, thanks for everyone's comments, very helpful!

I need a bit more reading and hopefully will finish everything by 31st Jan. However, when i receive the self assessment form, it says i could pay 3 months later after the letter that is dated on 11th Jan 2018. So I think I should be able to pay it before April. To be clear, the apartment was rented out in April 2016, my typo!!!

Mahsroh · 23 January 2018 at 9:02AM

ileven1225 wrote: »

when i receive the self assessment form, it says i could pay 3 months later after the letter that is dated on 11th Jan 2018. So I think I should be able to pay it before April.

Yes, this would be correct. If you notified them quite late in the day and they send a letter asking you to complete a tax return close to the deadline they do give you extra time to pay. Just bear in mind there may be some interest charges on whatever you owe, but (I'm assuming you wont owe significant amounts, I.e. in the thousands) - the interest charges should be negligible.

Comms69 · 23 January 2018 at 11:23AM

ileven1225 wrote: »

Hi Everyone,

The question might be obvious to some of you but i couldn't find the information online. I have called HMRC a number of times and their line is always busy. I own a lease hold property which has been rented out to produce some income since 2016 April. So I need to pay rental income tax between 01/04/2016 - 31/03/2017.

I am filling my selfaccessment form at the moment and would like to know what can be included as rental income deduction/relief for tax payment purpose. I listed the items i know:
service charge, lease hold

ground rent, lease hold

Mortgage - interest only

Any agency fee related, as it is managed by an agency.

I am currently renting a place to live in another city (other than the city where my owned property is). Can my monthly rental payment to another landlord be used to deduct my rental income?

I need to work out all expenses to see if it is more than £7500 to decide if I need to use rent-a-room scheme.

Thanks eveyrone in advance!
Dawei

No, obviously not.

PLEASE READ BEFORE POSTING

Rental income deduction/relief

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free