Can't sell flat, no choice but to let it, tax issues... :(

brooky_agb

dopester wrote: »

Lets hope in 2 years time you don't look back and see them as ridiculously good offers.

An education might be coming for some.

I agree with you entirely. Personally I don't think prices will be much lower in 2 years. If anything there seems to be signs of growing confidense. IMO

G_M

brooky_agb wrote: »

Thanks folks. I've been reading direct.gov.uk which is very useful. I'm expecting to have to pay approx £30k in personal tax this financial year 09/10. I terrified of the tax man and wouldn't dream of breaking the law. I expect that if my partner takes the income from the flat and adjusts her tax code or does self assessment then she would be paying less tax than I would so it looks like that's our only option.

Does anyone else do that? As the property is in my name is it me who has to cash the rental cheque?

HM R&C will not look kindly on your partner taking the income if the property is in your name. See the difference between tax evasion and tax avoidance!
Depending on your relationship you could consider putting the property into joint names.
If your relationship has not reached that point yet, that simply underlines the fact that putting the income in her name is a fiddle...!

silvercar

If the property is in joint names you can declare the percentage owned by each and account for the rent in the same split. If the property is owned by one person then they receive the rent.

brooky_agb

Ok great thanks for the clarification.

00ec25

G_M wrote: »

It's not 'profit', it's taxable income. I say this as there have been several similar threads here with people claiming that as they pay rent elsewhere they are not making 'profit' from the property they let out.

youi might see it as semantics, but if you let out a property (and do not use option B of the rent a room scheme) then you are very much taxed on your PROFIT not your (gross) income - in my original post I used quotation marks to imply that how you arrive at the "profit" figure is the important part, as witnessed by the many posts seeking guidance on allowanable expenses.

I appreciate you have a great deal of knowledge about tax, renting etc but it is an important distinction because that is how HMRC refer to it in all their guidance and is how it is described on the direct gov website

Dinah93

brooky_agb wrote: »

I agree with you entirely. Personally I don't think prices will be much lower in 2 years. If anything there seems to be signs of growing confidense. IMO

There are signs of an increase in buyers which happens every spring, I'd be interested to see if its still there once the house buying season is over. Even more so when the BOE base rate starts going up again and suddently people remember sub4% isn't the norm and payment shock kicks in.

Clearly you could have given the flat away, more than that some people even offered you money for it! Granted not an amount you consider reasonable but even so.

brooky_agb

Dinah93 wrote: »

There are signs of an increase in buyers which happens every spring, I'd be interested to see if its still there once the house buying season is over. Even more so when the BOE base rate starts going up again and suddently people remember sub4% isn't the norm and payment shock kicks in.

Clearly you could have given the flat away, more than that some people even offered you money for it! Granted not an amount you consider reasonable but even so.

I agree with you entirely. We are in the "busy months". With the offers I have got I would be £30,000 out of pocket which I'm not happy with. I'd prefer to take a punt and hope things pick up in 3 - 5 years and sell it then.

brooky_agb

Chest_Rockwell wrote: »

£30,000 out of pocket? No mortgage? Is this £30,000 on paper?

You're flat was/is obviously over-priced, and you obviously paid too much for it!

Your punt may end up costing you more then £30,000.

It's a risk I'm happy taking. BTW the flat was purchased in 2005, doing a nethouseprices search others in the block went for about the same. In my eyes I paid 130k and I've been offered 100k. That's a 30k loss regardless if I have paid it off or not. It's a stones throw from a main line train station and I know it will be easy to keep rented for three years or so.

Dinah93

If you're comfortable to keep hold of it for 5 years, there is as good a chance as not of prices having picked up by then. Plus if you're kept it five years, you might be able to push it to 7 or 8 if thats what it takes, you're in a decent position compared to many.

silvercar

Chest_Rockwell wrote: »

So what DID you ACTUALLY pay for it?? If you sold at 100k WHAT would you ACTUALLY lose in REAL terms? The TRUTH please!

Everyone else, could this be greed in action? Can we all agree on the fact that we all want to know what the OP actually paid for the one bedroom flat?

BTW, no-one will give two hoots that it's a stones throw from a train station. The in thing now is to be a stones throw from the Job Centre! Catch my drift? Rising unemployment, falling train commuters?

I think you need to understand that this is an open forum and not everyone wants to post all the details of their transactions.

As people hope to be employed, being near a train station has obvious advantages.

Buying near a jobcentre only has advantages if you intend spending the next few years, or longer, on benefit. If this is the case you would be better renting.