tax info/help needed - rental property thanks

[Deleted User]

Hi there, I have posted this in both the renting and tax forum as not sure which is most appropriate. this is my scenario. My partner and I bought a house to renovate/redecorate and rent out in Nov 2007. I have 2 tax related questions. Both of us work and pay lower rate tax through paye.

Between April 2008 and April 2009 we paid 3234.13 in interest on the mortgage, there was also some possible deductable allowances in this period

The property was not rented by anyone april 2008 to sept 2008.
Between 2008 and april 2009 the rental income in total was £3150.

The 1st question is, do we need to contact the tax office yet and/or complete an online tax return for this period (which I believe has to be done online by jan 31st).

The 2nd question is, as there has been no earnings during the period is it worth doing a tax return to carry over a loss for future years.

I have revewed all the tax info web sites and info provided on this site however feel I need some clarification. Many Thanks for any information.

N79

The answers are

1. Yes, Yes (best get your skates on)
2. Yes because you have to (you have had an income in the 2008-2009 tax year, the ability to carry any sustained loss forward is a bonus)

[Deleted User]

hi n79, thanks for the quick response. am i right in thinking as its shared between my partner and i that these are the steps needed.

1. both contact respective tax office to get UTP reference sent in post
2. go online, register and get activation and user id sent by post
3. go online and use either hmrc or customised tax programme (any reccomendations for ease of use ?)
4. complete said forms including allowances (interest on mortgage, council tax ?, building and contents insurance)
5. pray that its all done ontime

cheers

N79

Provided you are UK resident and do not fall into any category of persons who can not file online then yes your process is correct.

I have no recommendations on how the process works as I do not do it personally.

[Deleted User]

cheers, I must admit I though i didnt need to at first as we did not fall into either
income from property (before deducting allowable expenses) of £10,000 or more
income from property (after deducting allowable expenses) of £2,500 or more

is it because we work seperatly or just any additional income/profit needs to be declared?

N79

It is because you both have a rental income (as opposed to profit). You pay tax on all income, hence why all your income must be declared.

I have no idea why you think the exemptions you list exist?

[Deleted User]

http://www.hmrc.gov.uk/sa/need-tax-return.htm about a third down

although there is a good chance i may have interpreted this incorrectly

N79

Maybe not - HMRC change the rules every year so just because I have not heard of it does not mean it does not exist. It would still be worth carrying your loss forward for sunnier years.

[Deleted User]

ok, will give the old form a go. I suppose it will be good experience for future years. Just have this fear of a big complex mistake ridden nightmare coming back to bite me on the backside when im 60.

many thanks again

clutton_2

if you are managing the property yourself, then you can claim a lot more expenses -

CORGI-GASSAFE engineers fee for landlords gas safety certificate
building and contents insurance
telephone calls
marketing costs
petrol/mileage to go to the property / interview tenants
repairs
stamps/postage/office stationery
arrears
membership of professional landlords body such as National Landlords
ASsociation
suvbscriptions to property magazines
books on Landlord and tenant law
etc
etc




and if you run your BTL busines from home, then a share of your residential light/heat/power to fun your office from

or if you do not self-manage then

agents fees

you really need some advice from a property accountant... as the amount of tax you may pay will be dependent on your other incomes...

but in the meantime there is a booklet on the tax website called IR150 - TAxation of rents which outlines all the expenses you can claim

losses must be carried forward to reduce your tax libaility for the next financial year

[Deleted User]

many thanks