Claiming tax credits and selling houses

chr1s999

Can somebody help?

I have been claiming tax credits for a few years. Last tax year I didn't work and my husband was self employed and has a couple of businesses. One made a 5,000 loss and the other made a 40,000 (new businesses which will hopefully do well in future years). However during that year he also sold three houses and made a 45,000 profit from these (capital gains). I have been told that profit from houses you don't have to declare for tax credits purposes, only the interest gained on the profit. Please can somebody tell me if this is correct (I have phoned tax credits who say this is correct, however I have had a couple of phone assistants who have said this is not correct !!!).

Also if I have to declare the house profit, can I offset the losses from self employment against capital gains?

Please can somebody help as I don't want to get in a mess

hotblu

Hello,

First off, you do need to declare your capital gains for tax credits purposes. With regards to declaring the interest only, this refers to interest off savings, not capital gains - hence you have to declare. Also, depending on what type of business the self employment was, youy should be able to offset for tax credits purposes.

HTH

Hotblu.

chr1s999

Hi, thanks for your reply

Why am I being told off the tax credit helpline that I do not have to delcare profit from houses and when I query this and say so what if I sell 100 houses this year, they say it remains the same (as in you do not have to declare) !!!!!!!!!!!!!!

chr1s999

This matter is really on my mind as when I send my tax credit form back before January I obviously want to make sure that the correct self employment figure is on it. Because of this I have today phoned the tax credit helpline AGAIN to ask if I can have what they have told me in writing. I spoke to a really nice man who explained that profit from selling houses is NOT relevant for tax credit purposes and they would only want to know if the profit was invested in shares, bonds, bank account etc and the interest earned from this (if over 300 pound). I explained my obvious concern about being overpaid and he was adament that he was right and that all phone calls are recorded and that notes were on the screen from my previous calls stating the same information (i.e that it isn't relevant for tax credit purposes). Sorry to moan on but just wondered if anybody else had a take on this. I really would just like to take what tax credits say as correct but we all know their reputation . . . . .

CIS

All the income rules should be here
http://www.hmrc.gov.uk/manuals/tctmanual/index.htm

hotblu

chr1s999 wrote: »

This matter is really on my mind as when I send my tax credit form back before January I obviously want to make sure that the correct self employment figure is on it. Because of this I have today phoned the tax credit helpline AGAIN to ask if I can have what they have told me in writing. I spoke to a really nice man who explained that profit from selling houses is NOT relevant for tax credit purposes and they would only want to know if the profit was invested in shares, bonds, bank account etc and the interest earned from this (if over 300 pound). I explained my obvious concern about being overpaid and he was adament that he was right and that all phone calls are recorded and that notes were on the screen from my previous calls stating the same information (i.e that it isn't relevant for tax credit purposes). Sorry to moan on but just wondered if anybody else had a take on this. I really would just like to take what tax credits say as correct but we all know their reputation . . . . .

Hello again,

I can totally understand your concerns regarding this, but when you are phoning and saying you are making a profit selling houses the advisor's probably dont realise this is called capital gains, and therefore taxable. You should have got guidance notes with your renewal pack which confirms that it is a taxable income. I appreciate that it must be frustrating that tax credits advisor's are telling you that it isn't taxable, and it is correct, all calls are recorded. My only concern is that TCO are taking a very hard stance on o/p's and may just turned around and say you had the guidance and should have been aware that you had to declare this income. Also, why not try phoning and asking to speak to a t/l and voice your concerns to them.

HTH

Hotblu

sarahlouise210

Make sure they understand that the profit you have made is from selling property and not you own main residence that you live in - there may be the confusion with the advisors.

chr1s999

Hi

What do you mean 'speak to a t/i'. What is one of these?

Thanks

poppyscorner

I think the op meant team leader (t/l)

sarahlouise210

to be honest the team leaders often know less than the advisors as they concentrate on manegerial procedures while the advisors deal with claims every day

hotblu

Hello sarahlouise210,

The only reason I advised OP to ask to speak to a t/l (team leader) is because they are becoming frustrated/concerened about differing advice. This will highlight the issue to the team leader, and before they answer the question of wether to declare the income or not hopefully they will look into it first and reassure the OP. It was just a thought.

HTH

Hotlu

Ps, OP - let us know the outcome