How do i put this right?

TheQuietMan

Thanks for the link Masha - very useful. I understand we are able to deduct certain expenses such as mortgage interest, insurances and the cost of visiting the property for inspection, however what would be deemed as a reasonable claim for mileage? Monthly/quarterly?

Also, I don't think we have the original insurance policies dating back as far as 2008. Maybe just the last couple of years. Does this mean we are not able to include these as deductible expenses if we cannot provide proof?

IainHL

TheQuietMan wrote: »

My situation is this: my wife and i have owned and rented out a property since October 2008.

Also, please be aware that as a married couple HMRC will presume everything is split 50/50, both the rental income and all the expenses.

That means that both your wife and yourself need to make the declaration to HMRC, but does also bring into play both of your personal allowances.

masha

TheQuietMan wrote: »

Also, I don't think we have the original insurance policies dating back as far as 2008. Maybe just the last couple of years. Does this mean we are not able to include these as deductible expenses if we cannot provide proof?

My accountant said that I could estimate the missing insurance policy costs, based on the ones that I do have, and include them in the expenses.

TheQuietMan

Yes thanks IainHL was aware of the 50/50 split as a married couple. I understand we need to submit separate forms but will they be able to tie them in to relating to the same property or does that matter?
We are both working full time so I think that takes us over the allowance?

00ec25

TheQuietMan wrote: »

Thanks for the link Masha - very useful. I understand we are able to deduct certain expenses such as mortgage interest, insurances and the cost of visiting the property for inspection, however what would be deemed as a reasonable claim for mileage? Monthly/quarterly?
you may only claim for actual journeys undertaken using the actual mileage driven provided that the purpose of the journey to the property was wholly business related. As such the frequency of claims will reflect reality not some monthly timetable
http://www.hmrc.gov.uk/manuals/pimmanual/pim2210.htm

Also, I don't think we have the original insurance policies dating back as far as 2008. Maybe just the last couple of years. Does this mean we are not able to include these as deductible expenses if we cannot provide proof?
you are submitting a self assessment claim so you should be able to provide evidence to support your claims if HMRC come calling - the chances of that happening are down to you to gamble with

I understand we need to submit separate forms but will they be able to tie them in to relating to the same property or does that matter?
We are both working full time so I think that takes us over the allowance?you are submitting individual claims as self assessments. there are ways HMRC can tie tax returns together by property but this is not an issue for you or your wife if your respective submissions are correct to start with!

as above......

TheQuietMan

That's great 00ec25, that's what i thought.

I will only deduct what i can provide documents for, although the frequency of visiting is a difficult one to prove or dispute, thus why i was asking what would seem a reasonable amount to claim for. In reality i visit the property 2 or 3 times a year so that's what i'll claim for and, although i don't have receipts for the journeys, i don't think that is an unreasonable amount to claim for.

Also, i had to replace the freezer in the property last year. Is this deductible or not? I have kept the receipt for this therefore can provide if required.

Thanks again for everyone's input and advice.:T

00ec25

TheQuietMan wrote: »

Also, i had to replace the freezer in the property last year. Is this deductible or not? I have kept the receipt for this therefore can provide if required.

is the property furnished or unfurnished?
if furnished are you going to claim the Wear and tear Allowance or use the Replacement Costs method. Once chosen you cannot chop and change

can i suggest that rather than ask individual questions as they occur to you it is time you either employed an accountant to do your first return for you (and then DIY it in later years ) or you read up on rental taxation and then ask what you don't understand rather than haven't yet found out

http://www.hmrc.gov.uk/manuals/pimmanual/pim3200.htm

https://www.gov.uk/renting-out-a-property/paying-tax

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

TheQuietMan

Yes you are right. I guess I was initially scared/nervous/unsure about contacting HMRC as it is all seems so complicated to me. However, after receiving the advice I have from the people in this forum, it has allayed my fears somewhat. I realise I have asked a lot of questions, however I guess I just wanted to be sure before contacting them.

I think I will fill in the forms myself as I don't know any accountants and wouldn't feel comfortable with my first contact being asking them to sort out my mistakes for me. Maybe once I have got everything back above board I may pay someone to do it for us in future. (Although if I can sort this out myself then future returns shoild be much more straightforward!!)

Moonmoney

TheQuietMan wrote: »

Also, i had to replace the freezer in the property last year. Is this deductible or not? I have kept the receipt for this therefore can provide if required.

Hi QuietMan Keep all your receipts, whether for 1p or £1,000, all your paperwork and all your bills relating to the rental property for as long as you can, even after each years SA is filed.

I would enter the cost of the freezer into your tax return as an expense - not sure however whether you need to halve this cost in order to 'share' the expense with your wife on her tax return.

00ec25

Moonmoney wrote: »

Hi QuietMan Keep all your receipts, whether for 1p or £1,000, all your paperwork and all your bills relating to the rental property for as long as you can, even after each years SA is filed.

I would enter the cost of the freezer into your tax return as an expense - not sure however whether you need to halve this cost in order to 'share' the expense with your wife on her tax return.

excuse me:
are you advising him to adopt the replacement cost method, if so do you know why you are recommending that approach and what its implications are for next year and his ongoing income tax liability? You don't sound like you do so if you don't know what that is then you should not post on tax matters especially if you are not sure over something as basic as joint ownership when married and thus the split of net profit

document retention is set out by HMRC and is not "for as long as you can". For a rental business it is 6 years after the end of the tax year to which they relate. For all other elements of a personal tax return it is one year
http://www.hmrc.gov.uk/sa/record-keeping.htm
http://www.hmrc.gov.uk/sa/rec-keep-self-emp.htm