Unemployed parents rental income self assessment

dellboy102

I'm pretty sure the expenses were not too bad, maybe about £600, parents moved out and left their existing beds and furniture so no receipts to show for any purchases, I'll have to see if I can get mum registered too because as you said pity to pay tax for no reason I'll try and work it out.

Does this sound roughly correct: £9000 gross - his PA of £7,475 = £1525, then i'll find some deductions (lets say £500) so his taxable incoming would be £1025? so tax of £205?

jennifernil

If rent is £9000, you can deduct £900 under the wear and tear bit, then other expenses like insurance etc (see that list above).


Don't forget dad's pension, that counts too. He should have a P60 from it saying the total and showing any tax deducted.

PA last year (10/11) was £6475

When did they start renting out the property? And when did he start getting his pension?

dellboy102

I'll find out the dates, my mistake I ignored the pension as I thought that was taxed already so wouldnt have to consider that for calculating tax but i'm not too sure on how it works I'll find the P60 when I get home

ceh209

If you receive a notice to file a tax return for your mum, you'll have until 31 Jan 2012, or 3 months from the date of the notice whichever is later.

So 3 months in this case, if you decide it is needed after all.

Cook_County

There would have been legal fees for the agreement, insurance, ground rent and of course the gas safety certificate as it would not have been legal to rent it without.

The list provided above by somethingcorporate is an excellent guide.

You cannot allocate income between your parents at your whim I am afraid.

jennifernil

No, quite, it is half each when people are married.

dellboy102

Sorry one last question, they've lost the receipt for the electrical survey, its £150 minimum but I remember it being closer to £400 as work needed to be done, if I include this will we need to send off the invoice? they've only got the certificate and the company cant provide the invoice now.

jennifernil

As I understand it, you do not need to send in invoices/receipts, but do have to be able to provide proof of the amount claimed if asked.

How was it paid? Cheque, debit card, credit card? These would all leave a paper trail in bank or card statements, which may well be accepted.

00ec25

jennifernil wrote: »

If rent is £9000, you can deduct £900 under the wear and tear bit, then other expenses like insurance etc (see that list above).

I realise its a bit late for this post, but the wear and tear allowance is NOT simply 10% of the gross rent. It is 10% of the rent AFTER the LL has excluded any costs which (S)he may actually pay but which would normally (legally) would be paid by the tenant - this is called the "net" rent.

The most obvious one is council tax - if the LL pays that then he must deduct that from his "rent" in order to give the net rent on which he applies to 10% W&T allowance (unless the property is an HMO)
all explained on HMRC website here