Declaring 2nd property and tax - help please.

missk_2 · 14 June 2007 at 4:02PM

This might be a VERY silly question but I need some advice please if anyone can help.

My OH has a property in his name (in addition to our joint property). We rent out the 2nd property but make absolutely no money on it, a loss just on the mortgage payment each month alone. Anyway, the mortgage is paid out of our joint account and the tennant pays the rent into our joint account, insurance and anything else relating to it comes out of our joint account. We just have never swapped the title from his name to joint names. This 2nd property was OH's residence for around 6 years till we bought somewhere together.

What I'd like to know is who needs to declare this to the IR - me / him or both of us? Also, as we are making a loss overall (property has not increased in value either so no profit gain there), do we still declare it and if so, how, where, etc. etc? I'm a bit worried that OH won't get round to it and I'm the one worrying about it all.

I hope someone can help point me in the right direction.
Thanks in advance.

kirsty99 · 14 June 2007 at 5:45PM

There is lots of useful advice on the HMRC website, and also on this site:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435

Even if you are making a loss overall at the moment you can still declare that, and carry it forwards to the following year - which could be helpful if things change and you start to make a profit.

You could always give your local tax office a call - they are usually very helpful and would be able to advise you.

silvercar · 16 June 2007 at 12:22PM

He needs to declare it on his tax return. You will probably be better keeping it in his name as, when it comes time to sell, he will have a load more tax reliefs available to him as he has lived in the property.