Let property disclosure

Dazed_and_C0nfused

THEFIZZ said:

I earn around £12k a year. I am
not and never have been in receipt of any benefits. 

It was an oversight that rental income not declared. 

Apart from the Child Benefit you mentioned in the previous post of course.

My daughter is 20, I have not received child benefit for a few years 

Countrysider

THEFIZZ said:

I earn around £12k a year. I am
not and never have been in receipt of any benefits. 

It was an oversight that rental income not declared. 

Thanks for clarifying. Then the only issue is the rental income. Use a calculator to see what you should have paid. Most allow you to go back a few years to check different tax years, like this https://taxscouts.com/calculator/rental-income-tax/

This will give you a general figure. I don't know about penalties but given they've asked you to declare it seems more like an amnesty. 

Jeremy535897

THEFIZZ said:

Just myself as homeowner. No mortgage. No other outgoings. 

I do pay a management fee each month of £40. 

Thanks for clarifying. I suggest you follow Dazed's advice.

THEFIZZ

Dear countrysider, 

you are one of the reasons I was reluctant to post asking for help/advice 

you made comment on how long it took for HMRC to catch up with me, I think you will find there are many others in same situations. You have implied also I did not declare due to my claiming of UC, I’ve never claimed any benefits and you also made comment about HICB. 

Please get your facts right. I only wanted some help and advice. Neither of which you have provided. I’m future think about the person you are replying to. I stated I am already stressed about this matter and comments like yours do not help. 

Dazed_and_C0nfused

I have some good news 🙂

I completely forgot about the property allowance.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

As you seem to have a low level of expenses you may be better off not claiming those and opting for the £1,000 property allowance instead.

Let's say not claiming actual expenses makes your rental income £440/month.

That's £5,280/year less £1,000 property allowance = £4,280 profit rather than the £4,800 I was originally assuming.

Every little helps.

Jeremy535897

I should add though that I am not clear why you spent your daughter's inheritance as well as your own on a property you own and receive the rent from? Or did your mother's will actually leave the money to you? Is your daughter an adult? If not, and your mother left her money directly, there is an argument that as you used her money, part of the property belongs to her (as does part of the rent).

Countrysider

You have implied also I did not declare due to my claiming of UC, I’ve never claimed any benefits and you also made comment about HICB. 

By your own admission you said you never thought to pay taxes on rental income so I was attempting to make you aware of something else you might not have considered.

 THEFIZZ said:

I think you will find there are many others in same situations. 

Of that I am in no doubt. 

THEFIZZ

I used the money my mother left my daughter as an investment. The share of the property is roughly 70/30. I use the income to give my daughter a better quality of life (she is a 20 year old student) I tried reading up on the income going to my daughter but it was confusing me. 

Jeremy535897

If your daughter was under 18 when you bought the property, legally I suspect that you hold a share of the property (30%?) for your daughter, and that share of the income is hers. This is a legal question (I am not familiar with Scottish law), complicated by the fact that your daughter is now an adult. It would be sensible to speak to a solicitor. It could affect student grants too (not an area I know about).

Doozergirl

Who owns the property?  I know you're taking the rent but in England I think that the income is supposed to be declared by whoever owns it, so if your daughter owns the property and doesn't work, then she's probably under the taxable income threshold. 

You could do with a chat with a friendly accountant who can do the returns for you.    The worst case is going to be 20% of the entire rental income if it's owned in your name, plus some kind of penalty.  

An accountant will help you work out what deductions you can make based on the sort of expenses that you have incurred during that time.   That will be a little chunk of money this time around, but you can do your own returns correctly each year from hereon in and not pay more than you should through not knowing what allowances there might be. HMRC won't be offering that advice to you so don't let them take you for more than is due.  

Don't panic.