respossession and HMRC

Euphoria1z

Hi

I have buy to let properties that are due to be repossessed shortly and was wondering how to fill out the self assessment tax return when it arrives next year?

1-just to make things simple, if i havent recieved any rent (due to property being empty) this current tax year, but have mortgages and loans outstanding and i havent paid the monthly installments for the current tax year either, then do i show £0 rent, but still fill in the monthly loan (interest repayment) or do i show this as also being £0 as i havent paid the installments of the loans?

do i show neither profit nor loss or do i show as a loss as theres mortgages and loans outstanding even though no rent was recieved but no payments were made either?

2-do i inform HMRC only once properties have been repossessed (as this may happen slightly after april 2013) or let them know this will happen in advance so they dont question why the tax return is so vastly different from last year?

hope this makes sense as im not sure how else to put this.

Thanks

agrinnall

I would have thought you might be better ringing HMRC yourself to get a definitive answer from them rather than relying on an anonymous stranger to give you the right answer.

jimmo

The strict answer is that you are assessable on the rents due minus expenses incurred, not the amount received less expenses paid.

However, before going into more detail and working it all out you may wish to consider whether any losses you calculate will be of any use to you.

If you still have other let properties your lettings business will continue and you may well have a use for the losses.

If your lettings business ceases the losses will be of no use to you.

http://www.hmrc.gov.uk/manuals/pimmanual/PIM2510.htm

http://www.hmrc.gov.uk/manuals/pimmanual/PIM4210.htm

Euphoria1z

hi, thanks for the replys. the rental business will cease completely. im awaiting for the properties to be repossessed. none of them are let out and im not paying mortgages either so was just wondering how to fill out the tax return, but i guess if no loss can be carried forward then this answers my question.

i thought the loss could be carried forward to offset against my employment income but your links suggest otherwise.

thanks