Do I pay tax if rent income is less than Personal Allowance.

cidfenmaria

new landlord question.


I am a house keeper without a job and rent a property out which I own (no mortgage) and the annual rent income is much less than the standard Personal Allowance.

I do not have other income. Do I need to pay tax ? Do I need to do the self assessment still?

thanks

Comms69

No tax will be due, but you must complete a self assessment


(this assumes you are the sole owner)

cidfenmaria

thanks for the reply.



sole owner.


Am I classified as "not self-employed" there [gov.uk/log-in-file-self-assessment-tax-return]

Smosal

There is a lower limit for having to declare rental income. If your income falls below this, then no self assessment is due. I believe the lower limit, before expenses is £2500

00ec25

Smosal wrote: »

There is a lower limit for having to declare rental income. If your income falls below this, then no self assessment is due. I believe the lower limit, before expenses is £2500

people often misunderstand that wording

if your gross rental income is less than £2,500 you are not required to register for self assessment, but you must still contact HMRC and tell them you have rental income.

HMRC will then decide how they want to deal with you, which may include requiring you to do a tax return nonetheless, or they may just (rarely) agree to accept numbers of papers from you.

00ec25

cidfenmaria wrote: »

thanks for the reply.
sole owner.
Am I classified as "not self-employed" there [gov.uk/log-in-file-self-assessment-tax-return]

you are classed as a person with UK property income - ie a category all on its own and neither employed nor self employed

obviously you will not pay tax if your rental profits and all other income you get added together are less than your tax free allowance. That is why it is called a tax free allowance.

nonetheless, you still have to contact HMRC - by phone or by letter

G_M

00ec25 wrote: »

you are classed as a person with UK property income - ie a category all on its own and neither employed nor self employed

obviously you will not pay tax if your rental profits and all other income you get added together are less than your tax free allowance. That is why it is called a tax free allowance.

nonetheless, you still have to contact HMRC - by phone or by letter

I'd do it by letter. Parly to save yourself having to listen to musak for 2 hours, but alo so you can keep a copy.

Smosal

Thank you for clarifying the exact requirement. I only knew about the lower limit because I had previously contacted HMRC on an associated matter and had been advised that due to the low rental income (new rental and only one months rent received in the tax year) no self assessment was necessary as the rental income was below the lower limit.