How long to keep tax documents in general and when about to rent out a property?

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
5 replies 437 views
GreenSheepGreenSheep Forumite
195 Posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
I’m about to rent out my flat and move in with my partner.
Up until now I have been purely PAYE and so have kept tax documents for 12 months and then binned.

I keep no other documents for long: I keep bills from things like the gas, electricity, water and council tax until the next one arrives then I bin the last one once I’ve checked the last payment is noted and continue store the current one.

I only currently have the last years tax bits (my P60, Annual Interest Summaries from banks, etc.). I have no other investments (well I do, but all wrapped up in an ISA so doesn’t apply).

So my flat should be rented in the next few weeks and I will start saving records for tax return but how long should I then keep them for? And should I be concerned that I don’t have any previous years? Surely these wouldn’t ever be requested as I’ve only just started to get another income?

I’m basically after a rule of thumb now as I’ve heard every variation up to 8 years on Google? But is this only bits related to the rental income and can I bin my P60s?

Also; my rent will come into my account by standing order and I won’t have rental income statements. When it comes to tax returns will I just say the figures on my bank statement? Will I need to provide proof? Or will they just accept figures and investigate me if they think its lies? Only been PAYE until now!

Cheers!

Replies

  • dr_adidas01dr_adidas01 Forumite
    1.9K Posts
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    This should be posted in the:

    The House Buying, Renting & Selling Board

    http://forums.moneysavingexpert.com/forumdisplay.php?f=16

    They will have better experience and could help you more, as this forum is about bank accounts and budgeting.
    Time is a path from the past to the future and back again. The present is the crossroads of both. :cool:
  • izoolsizools Forumite
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    It is also worth noting that if you have a standard residential mortgage (which you will, unless you own the flat outright), that you don't have automatic permission to let from the lender.

    You need to seek permission to let from them. They are likely to impose special terms.

    If you let without their consent, there are many ways they can find out, and their penalties can include:

    > Writing to "The occupier" at the address telling them of your infraction requesting they vacate the premises
    > Load your interest rate for the increased risk - this will far outweigh any increase in interest they add for letting with consent
    > Repossess the property

    And don't think you can just "risk it" - I was on the flip side of this myself a few years ago as a tenant and the lender (Chelsea Building Society) wrote to "the occupier" requesting I leave and wrote to the landlady increasing her mortgage APR by 2.5%.

    They told her she could not let the property at all until her LTV dropped below 60%.
    Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
  • Not sure they can actually repossess the property although they could theoretically ask for immediate repayment of the mortgage.
    Thinking critically since 1996....
  • izools wrote: »
    It is also worth noting that if you have a standard residential mortgage (which you will, unless you own the flat outright), that you don't have automatic permission to let from the lender.

    You need to seek permission to let from them. They are likely to impose special terms.

    If you let without their consent, there are many ways they can find out, and their penalties can include:

    > Writing to "The occupier" at the address telling them of your infraction requesting they vacate the premises
    > Load your interest rate for the increased risk - this will far outweigh any increase in interest they add for letting with consent
    > Repossess the property

    And don't think you can just "risk it" - I was on the flip side of this myself a few years ago as a tenant and the lender (Chelsea Building Society) wrote to "the occupier" requesting I leave and wrote to the landlady increasing her mortgage APR by 2.5%.

    They told her she could not let the property at all until her LTV dropped below 60%.

    I have a consent letter from Abbey to rent at my current rate.
    I have a LTV of 40%ish (c.£220k to c.£90).
    I have an EPC.
    I have a Gas Safe.
    I have rewired and self certified with building control.
    I have PAT tested everything left and assembled a folder of manuals for electrical equipment.
    I have my buildings insurance ready to switch to landlords when a tennent is found.
    I have scanned and rescanned my lease for restrictions.
    I have found a letting agent at the right price who I trust.
    I have contracts ready to go.
    I have sorted a scheme to store the deposit.

    I haven't worked out the tax...
  • jenniferniljennifernil Forumite
    5.3K Posts
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    I suggest you open an account purely to deal with the rental property. Get all the rent paid into it and pay all expenses out of it, that way it is easy to see the figures you need for your tax return.

    It used to be the case that you should keep all tax and other records for 6 years (not elec bills etc) but I think it is a bit less now?

    I would be making a folder for everything pertaining to the rental property and keeping it for several years (minimum 4). After a couple of years you could scan things and keep them electronically if you are short on space for paperwork.
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