rental income and tax - in a mess

debtfreeat40

Can anyone offer any advice on what I should do about rental income and tax.
My husband left me in 2008 for a neighbour of ours and moved in with her.
I wasn't coping as they lived so close so I moved out (the house is mine) I rented it out but have never paid tax on it.
My brother has pointed out to me I should have been paying tax all this time and I'm now v worried I owe thousands.
Any advice anyone?

Tixy

You should likely have been paying some tax.

It wouldn't be tax on the whole income, but on the profit you made (after allowable expenses which would include mortgage interest if you had a mortgage on the property).

Do you have other taxable income as well? e.g. do you work and pay tax?

First thing to do is to start pulling together details of what rent you have been paid in that time and what costs you have paid out renting it out (e.g. costs like building insurance/gas checks etc, agents fees if you paid them to manage the property or to find a tenant, mortgage interest).

debtfreeat40

Thanks for that - yes I'm employed full time.

happycamel_2

Yes you should have registered for self assessment and be being taxed on your profit (not your rental income).

This is rental income minus allowable expenditure such as mortgage interest (not the capital repayment bit), maintenance and professional fees. Have you got the landlord's gas certificate sorted and have you registered the deposit. Uou are an accidental landlord but there is still a lot you need to understand (I say this as an accidental landlord myself).

Given that you'll be late declaring your tax and you haven't done these calculations before I recommend gathering your paperwork and paying a local accountant to do your first set of returns.

happy_bunny_2

Really depends on how much profit you have made.

If none or not a lot, give the tax man a call.

I used to rent out a house many years ago and as I never made much of a profit the tax man told me not to bother with a tax return but to tell them if this changed.

june.elizabeth

My daughter did this for 6 years and the tax office had her in for an interview. After producing all the info they asked for, mortgage interest receipts for maintenance etc they arrived at a very low figure of tax owing and in fact then wrote it off. She did not make much profit.

I would suggest it is better for you to contact them and not wait for them to find out. She had changed her mortgage to a buy to rent and had permission from her Mortgage Provider.

debtfreeat40

Thanks everyone for your help. I do it through an estate agent so the gas certificate is up to date and the bond is in a correct deposit account. I'm going to get an accountant friend to help with the tax.

Weird_Nev

the tax will, as said, be minimal. It's only on the profit.

I paid £80 tax for letting our place out for a year, just covering mortgage really.

1948dolores

In the same boat I have a property rented out this past 9 years which has no mortgage. I have not filled in a tax return because the amount of rent does not exceed my tax allowance as I have no other income.This property was bought in joint names and was changed into my name before we move out of it and moved aboard, then I rented it out.