Question about tax on rental income

pete_holloway

Bit of a novice question but I have a second, very small, income from renting a flat. Up until August 2010 the income from this flat, lets say its £2000, was being held in a solicitor's account.

Now, do I have to pay tax on that amount in this upcoming tax deadline? Or do I pay tax on it in NEXT years deadline, seeing as the money wasn't in my own account until after last year's cut off?

Apologies my incompetent attempt at explaining this. Can anyone help? Cheers.

ceeforcat

When it arrives in your own account is not relevant as it appears that it remained your money throughout the time it was in your solicitor's account.

chrismac1

There is a potential 09-10 tax bill arising from any rents due to you from 6 Apr 09 to 5 April 2010.

MoneySavingUser

Property income is taxed on an accruals basis - therefore anything due for payment between 6 April 09 and 5 April 10 - regardless of when you receive the cash

lazer

MoneySavingUser wrote: »

Property income is taxed on an accruals basis - therefore anything due for payment between 6 April 09 and 5 April 10 - regardless of when you receive the cash

Actually, HMRC allow you to use the cash basis for property rental as long as the Income (Rent Receipts) are below £15,000

OP - not exactly sure how this woks if the money is with a solicitor, although i would assume, that the date the tenent pays over the rent is the date it is counted as paid.

Also - remember to work out your expenses and deduct these from the rent received.
There is a 10% wear and tear allowance that you can claim against the rental income instead of claining for costs for replacement furniture etc