Tax on renting out a property

Terrysdelight

Hi

A question from my uncle - he is currently living with his girlfriend in her home (82 years old and he has a girlfriend!). He is renting his own home out and wants to know if he has to pay tax on it and how he would declare it.

Would he be covered under the capital gains tax - i.e. the rental income is only £6000 pa, and therefore, nothing to pay because of the annual capital gains tax allowance is £9600?

Many thanks
Terri

sarflee

I thought CG only came into when selling/relinquishing the property. Even then it appears this is your father's only property not a second property, so there would appear to be no captial gain.

I think the rental income less any expenses is classed as taxable income and this should be declared to the tax people.

jennifernil

rental income is subject to normal income tax. he needs to notify HMRC after the end of the tax year.

sarflee

I would advise the tax office now because if he need to complete a self assessment tax return, these are due to be issued shortly after 6/4/09.

Terrysdelight

jennifernil wrote: »

rental income is subject to normal income tax. he needs to notify HMRC after the end of the tax year.

Many thanks.

silvercar

You complete the tax return by the end of the january after the end of the tax year. So for the tax year April 2008- April 2009, the tax return would need to be submitted by 31 January 2010. Slightly earlier if you are not submitting online.

Ste_C

He will need to inform HMRC that he is receiving income from renting.

But he shouldn't have any tax to pay on £6000 - remember he can claim expenses against this income for the upkeep of the property, insurance etc

As others have said, he should notify HMRC as soon as possible.