Is rent income covered by personal allowance?

sheramber

 HMRC may be querying whether her  partner received any rental income.

[Deleted User]

sheramber said:

 HMRC may be querying whether her  partner received any rental income.

Agreed - in which case they should be writing to her partner as an entirely separate enquiry.

CKhalvashi

I think this is one for an accountant honestly, as this support will likely mitigate any penalties from missing tax returns, which at this stage may be very large (up to £1600/year or £8000 total for the missing SA returns, plus tax and interest on any potential tax due).

This definitely isn't a matter for a forum.

[Deleted User]

CKhalvashi said:

I think this is one for an accountant honestly, as this support will likely mitigate any penalties from missing tax returns, which at this stage may be very large (up to £1600/year or £8000 total for the missing SA returns, plus tax and interest on any potential tax due).

This definitely isn't a matter for a forum.

Don’t think that it will be anywhere close to those figures. It is all speculation but a few on here who have considerable experience of HMRC investigations have advised the op to suggest to her sister to do just that. 

Jeremy535897

sheramber said:

 HMRC may be querying whether her  partner received any rental income.

They can check with either the land registry or the deposit holder (who apparently they have already contacted) to see whether the partner has an interest in the property. They shouldn't be bothering someone who has no right to answer their questions even if she wanted to.

CKhalvashi

[Deleted User] said:

CKhalvashi said:

I think this is one for an accountant honestly, as this support will likely mitigate any penalties from missing tax returns, which at this stage may be very large (up to £1600/year or £8000 total for the missing SA returns, plus tax and interest on any potential tax due).

This definitely isn't a matter for a forum.

Don’t think that it will be anywhere close to those figures. It is all speculation but a few on here who have considerable experience of HMRC investigations have advised the op to suggest to her sister to do just that. 

I don't have direct experience with missing/incorrect returns (HMRC did audit my tax return a few years ago, turns out they owed me about 50p), however for a late 2015/16 return, the penalty will be £1600 according to gov.uk, excluding any interest and other charges. A professional will likely be able to mitigate this somewhat, in some cases down to £0, if it can be shown that there was reason to believe a tax return wouldn't have been due on OP's part. This is what they're paid for.

[Deleted User]

CKhalvashi said:

purdyoaten2 said:

CKhalvashi said:

I think this is one for an accountant honestly, as this support will likely mitigate any penalties from missing tax returns, which at this stage may be very large (up to £1600/year or £8000 total for the missing SA returns, plus tax and interest on any potential tax due).

This definitely isn't a matter for a forum.

Don’t think that it will be anywhere close to those figures. It is all speculation but a few on here who have considerable experience of HMRC investigations have advised the op to suggest to her sister to do just that. 

I don't have direct experience with missing/incorrect returns (HMRC did audit my tax return a few years ago, turns out they owed me about 50p), however for a late 2015/16 return, the penalty will be £1600 according to gov.uk, excluding any interest and other charges. A professional will likely be able to mitigate this somewhat, in some cases down to £0, if it can be shown that there was reason to believe a tax return wouldn't have been due on OP's part. This is what they're paid for.

Yes - I  have almost forty years experience of just that (as have others who have replied on this thread) - I started out with the then Inland Revenue in 1982. I would be looking for and expect significant mitigation. This is not a complex case.

geoffplus

Thanks for all of your help. She does solely own the property and is the only one to benefit from the rental income. I will get her to put together all the income for the rental  period and any other income (just pension) as well as expenses for upkeep to the property. I will then get her an accountant to pull it all together and propose the way forward. I would hope that it is apparent to the HRMC it was a mistake on her part, and with all probability no tax owed or lost to them. It would be harsh to impose large penalties, but you never know I suppose

Jeremy535897

geoffplus said:

Thanks for all of your help. She does solely own the property and is the only one to benefit from the rental income. I will get her to put together all the income for the rental  period and any other income (just pension) as well as expenses for upkeep to the property. I will then get her an accountant to pull it all together and propose the way forward. I would hope that it is apparent to the HRMC it was a mistake on her part, and with all probability no tax owed or lost to them. It would be harsh to impose large penalties, but you never know I suppose

If this is easy, then do so, but you may be proposing to collect a whole load of data an expert will say is unnecessary. I would start with the most straightforward information, say the gross rent and gross pension for 2015/16 to 2020/21. That may only take moments to gather. Then select an adviser, preferably by word of mouth. Do you or she/her partner know anyone who has an accountant? They may not do this sort of work but could recommend someone who does.

geoffplus

Jeremy535897 said:

If this is easy, then do so, but you may be proposing to collect a whole load of data an expert will say is unnecessary. I would start with the most straightforward information, say the gross rent and gross pension for 2015/16 to 2020/21. That may only take moments to gather. Then select an adviser, preferably by word of mouth. Do you or she/her partner know anyone who has an accountant? They may not do this sort of work but could recommend someone who does.

I think it will be quite easy, but I take your point. I do know an accountant and it may be useful to get them involved from the start as they may save some time and work. Thanks