Filling in my first self assessment for 2016/17

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Filling in my first self assessment for 2016/17

    So I’ll try to keep this short with just two things I need clarification on as I keep reading conflicting things.

    I bought my my first property, cash, in February 2017. It hasn’t had a tenant in until September as considerable work needed doing.
    For the work done between Feb and April (2016/17 tax year) can I claim for the expenditure?
    Certain places say you can’t claim pre-letting expenses, but others say you can (this very website says you can https://www.landlordzone.co.uk/infor...tting-expenses).

    If I can’t claim pre-letting expenses at all, does that mean all the work I’ve done and money I’ve spent from Feb until September I’ve got to take the hit on and can’t claim against?! I haven’t had things like a new kitchen installed etc, it’s been lots of painting and garden work mostly (as it has two big gardens which were like the outback jungle!), carpet etc (it was a real mess).

    The second question is with regard to who claims the income. I now have two properties, both cash purchases, and they are joint tenants between my wife and I. Come next years tax return, if I am to claim the income then it will push me into the next tax bracket; but if my wife claims the income then it keeps her below the next bracket. Is that something we can do, decide who claims the income? Or is it’s best to split it 50/50?

    #2
    Originally posted by RedHitman View Post
    f I can’t claim pre-letting expenses at all, does that mean all the work I’ve done and money I’ve spent from Feb until September I’ve got to take the hit on and can’t claim against?!
    You claim against them when you sell. They are counted against the acquisition cost when computing CGT.

    Comment


      #3
      A thought on that though..... I can claim for utility bills and Council Tax though can't I.....?

      Bah that's a bit annoying. I don't plan to sell at all - I'm only 35 and these properties are my pension, to hopefully pass on to my children one day.

      So I can ONLY claim for works completed when a tenant moved in, is that correct?

      Comment


        #4
        If the refurbishment was necessary to bring the property to a lettable condition it is allowable against income (there's a maximum time limit of six years) and the expense is deemed to have been incurred on the first day of the new tenancy.

        Same with council tax and utility bills.

        If the work was more significant, adding a new room it's capital, if it is simply replacing something with a new something, it's almost certainly an expense allowable against revenue.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          And you can't do anything retrospective tax wise, but going forward, you can use a deed of trust (notified to HMRC with "form 17") to vary the proportions of ownership from the presumed 50:50 - which also changes the income split.

          Get proper legal advice on that, because it might need a change in ownership - and that might affect any lending on the property.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            jpkeates,

            Thanks for that.

            Yes, things like the washer was broke so I bought a new one. There were three gas leaks (which were discovered when having the Gas Cert done) so they needed to be rectified, which meant floor coming up etc etc. So yeah, lots of necessary work done.

            Comment


              #7
              Neither of those is likely to be capital expenditure.

              There's an overall issue if you bought a property at a significant under value and did a lot of work which resulted in that value increasing materially. But general maintenance is fine.

              This is as much an art as a science.
              A helpful rule of thumb is that if its something you would have had to do if the tenant had a problem, it's probably maintenance.
              If you introduce something that wasn't there before it possibly isn't.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment

              Latest Activity

              Collapse

              • When to claim accountant expense, same year or can it be added to previous year?
                by cuttingman
                Doing tax return for 2020-2021, paid accountant at the beginning of this month to check it. I gave them all my expenses including their fees and they put it in the tax return. But now that I thought about it because I paid in the 2021-2022 tax year I should add this expense to the next tax return....
                18-10-2021, 11:42 AM
              • Reply to When to claim accountant expense, same year or can it be added to previous year?
                by Gordon999
                The accountant has to start work after 6 April 2021 in order to cover the whole tax year of 2020-2021..

                So accountant's bill is correctly entered as an expense in current year.
                19-10-2021, 09:09 AM
              • Reply to When to claim accountant expense, same year or can it be added to previous year?
                by jpkeates
                Expenses should be claimed when they're committed or paid, so it looks like a mistake to me.
                18-10-2021, 11:59 AM
              • CGT check appreciated, thanks in advance!
                by tatemono
                Would really appreciate some help checking figures. Figures below are halved because my sister and I inherit in equal shares.
                • property valued at £187,500 at date of mother's death in Jan 2015
                • recent sale value £217,500
                • improvement costs £5,318
                • costs of sale: £2,440.50
                • no reliefs
                • my profit
                ...
                16-10-2021, 15:15 PM
              • Reply to CGT check appreciated, thanks in advance!
                by Gordon999
                OK. Your capital gain =£22,242 less £12, 300 = £9942 x 18% = £ 1790 tax bill to pay.
                17-10-2021, 17:53 PM
              • Reply to CGT Query
                by jessa46
                Thanks for reply, much appreciated.
                I asked my solicitor about the 30 day rule and he emailed me back saying I didn't need to do this as no cgt to pay but, as I do a yearly self assessment, to include it my self assessment. I'll be sending it off this week. There's a website called 'xxxx' which...
                17-10-2021, 16:33 PM
              • CGT Query
                by jessa46
                I have never claimed CGT allowance but may need to after selling an inherited property. The property gained in value during probate. The sold price was £153k and the valuation at death for 'capital gains purposes' was £130000. There are 3 shares. My share of selling price is £51k and share of gain...
                13-10-2021, 17:37 PM
              • Reply to CGT Query
                by AndrewDod
                - You have to submit the CGT calculations within 30 days regardless of whether there is CGT to pay (else you get large and increasing fines)

                No it is not added to your income for this purpose
                17-10-2021, 15:54 PM
              • Reply to CGT Query
                by jessa46
                Thank you for replies. Re how it was valued, this is where my head spins. Our mum passed away around 8 years ago. We got probate in 2019. Property was transferred into 3 siblings names in 2020, so that we could benefit from personal CGT allowance. The solicitor sent us a document 'for hmrc cgt purposes'...
                17-10-2021, 15:13 PM
              • Reply to CGT check appreciated, thanks in advance!
                by AndrewDod
                I'd imagine it would be payable as CGT by the individuals. Certainly that would apply to interest earned on savings during probate so don't think CGT would be different. It is definitely not payable by the estate (that would be grossly unfair to some beneficiaries who had not used various allowances)....
                17-10-2021, 13:05 PM
              Working...
              X