Obligations on no profit let

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  • Obligations on no profit let

    Help please!!

    I am letting a friend of mine stay at my flat. She is covering my mortgage and any utility bills she incurs, I am not making any profit out of this.

    Are there any obligations I have to fulfill or any tax implications for myself despite not making a profit?

    I would be grateful for any advice.

    H xx

  • #2
    Originally posted by hchalk View Post
    Help please!!

    I am letting a friend of mine stay at my flat. She is covering my mortgage and any utility bills she incurs, I am not making any profit out of this.

    Are there any obligations I have to fulfill or any tax implications for myself despite not making a profit?

    I would be grateful for any advice.

    H xx
    Assuning that you are the leaseholder, you may be in breach of mortgage conditions. Best to ask mortgagee (lender) for consent, to be on safe side.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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    • #3
      You will need to complete a Self-Assessment Tax Return regardless of money earned. Contact the HM Revenue and Customs.

      To add to jeffrey's answer, find out if you require your freeholder's permission too.

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      • #4
        & what about things like gas safety inspection/certificate guys?

        J

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        • #5
          Is this your residence as well or does she live there on her own? If she is on her own then you should treat it as a Landlord/Tenant relationship and qualify everything.

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          • #6
            What you posters might not realise that an act of generosity when somebody has experienced hardship (not necessarily in the financial sense) does not necessarily create any tenancy at all. What's more if no rent is being paid it definitely doesn't.
            The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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            • #7
              Originally posted by Paul_f View Post
              What you posters might not realise that an act of generosity when somebody has experienced hardship (not necessarily in the financial sense) does not necessarily create any tenancy at all. What's more if no rent is being paid it definitely doesn't.
              But she's "covering the mortgage"! I'm sure there are plenty of LLs around who consider themselves to be doing OK if their rents received during normal commercial tenancies are adequate to do that. And particularly if the mortgage is a repayment one, why on earth wouldn't the Inland Revenue take an interest? Income doesn't count because I'm helping out a friend?

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