income tax how to deal with it??

alirob12

Hi can some one advise me how to sort out this issue, I am in full time employment,earning 15k/yr, but my gf and I have had a holiday villa built, which we will let out to friends and are considering advertising it in some places to generate extra income, we wont probably charge our friends but obviously will others, therfore how shall we sort out the income we will get from that and how do we pay taxon our income from the villa lettings?to make sure it is all legal and done properly, thanks

Hoddie_2

You need to notify your tax office in writing. Advise them of the type (holiday lettings income) and the start date. Specify whether the property is within the UK or abroad. You will likely have to complete a tax return for the first tax year in which this income started, but depending on the amount they may be able to deal with it via your tax code in future years.

alirob12

yeah it is a property abroad and bothmyself and my girlfriend are on 15k, and I guess that means that we pay about 22% tax on our earnings (but becoz our employer sorts all of it 4 us we are not 2 sure how it all works and the income from the villa would be about 5k (our estimate)/year any ideas how this should be dealt with? thanks

Savvy_Sue

I can't help feeling that this is something you need specialist advice on, possibly from the Income Tax board or maybe the one about owning properties.

Because you'll have expenses as well as income related to this property, I know if it was in the UK then you could offset the expenses against the income. But if the property is abroad and the money you get in mostly comes in to your UK bank account, are there complications with offsetting expenditure which presumably mostly happens from a foreign bank account?

Hopefully you've checked all local tax laws and won't also be liable to pay tax abroad. If you are, then I don't think you'd have to pay it in the UK too. But I am no expert, which is why I think you need to make sure you get proper advice.

Plus, if it were me, I wouldn't let anyone stay there for free except possibly my closest family or very deserving cases. Discount, possibly, but you WILL have expenses related to the property, and it would be easier to charge everyone from the start than find that there are friends of friends who think they can use it too, or people you don't trust to use it again for free, or friends you have to turn down because you need more paid bookings.