Property Income less than £2500

ceeforcat

Reversing roles here in that I am not too proud in asking the question.

I have a client who rents out a property - no problem there and she is registered for self assessment. At my meeting with her last evening she surprises me by stating that the property is in the joint names of her elderly mother who has an income of less that £6000 per annum and is over 65. She had not told me about this previously as 'her mother does not get any of the income'. (Don't state the obvious!)

The half share of the income will be less than £2500 after expenses (turnover half share of £6000) and Mum will still not pay tax. I remember that one used to be able to download a form P810 to return this income but that appears to be no longer an option.

I really do not wish to involve this old lady in Self Assessment if at all possible. Am I still correct in saying that:

a) no SA return is necessary?
b) HMRC do not need to be informed given the income level.

Pennywise

If the mother doesn't get any of the income, then she has nothing to declare anyway, so SA doesn't come into it. For joint property owners who aren't married, the tax treatment of income follows the flow of money. If only one person receives the income, then it's only that person who declares it all.

http://www.hmrc.gov.uk/manuals/pimmanual/pim1030.htm

"Jointly owned property - no partnership

Where there is no partnership, the share of any profit or loss arising from jointly owned property will normally be the same as the share owned in the property being let. But joint owners can agree a different division of profits and losses and so occasionally the share of the profits or losses will be different from the share in the property. The share for tax purposes must be the same as the share actually agreed."

ceeforcat

Great stuff pennywise - but let us play devil's advocate. The reason that the mother is a joint owner is because my client was unable to raise the finance the purchase the property about seven years ago, before which it was jointly rented. Neither party live in the property any more.

I understand entirely your answer but my question was slghtly deeper. It would obviously suit if my client's mother was entitled to receive half of the income as she has unused personal allowances. My question is whether there is any requirement to make a return (I think not) and where we currently are in this ever changing world with regard to notification, given the low level of income.

ceeforcat

Anyone help then regarding the notification/declaration requirements where the net property income is less than £2500 with no tax ultimately payable?

jimmo

http://www.hmrc.gov.uk/manuals/emmanual/EM4551.htm

The following links refer to CG, but as there is no NI Involvement, the principles are the same.
https://forums.moneysavingexpert.com/discussion/2915004

https://forums.moneysavingexpert.com/discussion/3278590

suso

No p810 have been issued for a few years, the move is to try and accept information via "business by telephone"

If I remember correctly, there is no limit on the amount of income from property that can be declared and accepted over the phone.
It can be coded out out, obviously if you are declaring income over the limits for a SA return then it will trigger a return being issued.
If you are declaring a loss, it has to be made in writing. a letter will do.

limits for SA as follows, if either of these apply then a return is required
Gross income from property over 10,000
Net income (profit) from property over 2500

you'll be best having the gross income, total expenses, and net income handy when you call.

ceeforcat

Thanks jimmo - exactly what I wanted to hear in paragraph 2.

Thanks suso also.