Tax first time - a bit late ...

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

    Tax first time - a bit late ...

    Hi , I live in England and rented a London property for a year from early March 2017. All 12 months rent were paid up front. I also have a full time job.

    I'm guessing the entire 12 months payment counts towards (2016/2017) because it was made before April 1st 2017?

    I'd like to notify the tax man - I think it should have been by last Oct 2017 so may be at risk or penalties ..

    Should I just quickly notify HMRC now and then work out the figures later?

    Also I'd like to try doing this without an accountant. Is that a bad idea? [I'm good at maths, hate finance, but I've filled out Self Assesments ok before

    Is there a recommended site that clearly steps through allowable expenses etc or is HMRC site the best?

    #2
    I think you received one month rent in March 2017 ( tax year 2016-2017 ) and 11 months rent during April 2017- Feb 2018 ( tax year 2017-2018).

    So send a letter to notify HMRC and request advice of what tax return is required to be submitted

    Comment


      #3
      When you received the rent depends on whether you are accounting on a cash or accrual basis. All limited companies and larger sole traders need to use accruals. HMRC prefer everyone to use accruals, but allow cash, for very small sole traders, because accruals is a more difficult concept to grasp.

      With accruals, the money is treated as received when it is due, not when it is received, and only one month would actually have become due. With cash, the whole amount has been received.

      If you opt for accruals, you need to be consistent about that. Note, with accruals, if the tenant pays late, the rent is still taxable when they should have paid. If you pay any utilities, you need to split the last bill across the two tax years.

      To avoid penalties, I believe you will need to pay at least the final tax due by the end of today. I assume you will be OK if you pay too much, as it can be adjusted when HMRC make their calculations.

      Comment


        #4
        Thanks - I called HMRC - Calculated approx tax for the month (rent - 100% of interest only mortgage) * my current tax band, put a tenner on top, and paid with my NI number as reference (as UTR is in the post).

        I didnt really buy anothing more until after 1st April (Gardening equipment)

        Comment

        Latest Activity

        Collapse

        • Reply to Caught out by changes to Capital Gains Tax
          by jpkeates
          You have to make the return to tell HMRC there is no tax to pay, if that's the case.
          There is no option not to tell HMRC....
          09-12-2021, 09:58 AM
        • Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          I appreciate 'ignorance' is no excuse, however there are some mitigating factors, i.e. due to illness etc.

          1. Previous family home rented out - terrible tenants - left owing rent, bad repairs etc. [usual story for some] subsequently property not let for 2 years for a number of reasons while...
          06-12-2021, 13:51 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by Gordon999
          I think Andrew is correct .

          You start with 1/3 interest ( in 1982 valued at £6500 ? ) plus 1/6 interest from parent1 ( valued at £20K ?) plus 1/2 interest from parent 2 ( valued at £60K ? ). This probably takes your total entry cost to around £40K.

          Your total capital...
          09-12-2021, 09:47 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Hi Andrew
          First of all I've got an initial appointment to speak to an accountant on Friday!

          Can I just check where you write ' ...at death 1/6th of the value of the whole would have been deemed to pass to you for CGT purposes as the survivors would share the whole'.

          Does...
          08-12-2021, 18:02 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by jpkeates
          Even if probate wasn't mandatory, it would probably have been useful.
          08-12-2021, 13:44 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          Yes this would be the case if it was jointly owned (not as tenants in common). The situation would be that at death 1/6th of the value of the whole would have been deemed to pass to you (for CGT purposes), as the survivors would share the whole.

          So for the 3 periods you would be taken...
          08-12-2021, 12:51 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          jpkeates
          There was no estate as such, property jointly owned - they were both retired at time of purchase living on small pensions, hence I bought with them so they could stay in the home they'd been renting from council from early 1950s to March 1982 at time of purchase. And I paid for the initial...
          08-12-2021, 10:50 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by jpkeates
          I don't know the historic thresholds, but it's bizarre that there's no probate for both of your parents, their estate has to be tiny for that to be possible nowadays.
          It's probably too late for HMRC to do anything about that, but that process sets the values for CGT calculations later on, so it's...
          08-12-2021, 10:28 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Morning Andrew
          Thanks for your response early this morning and clarifying I have to make three separate calculations [the split wasn't clear on the CGT calculator].
          I understand the query on the value but this is an ex council house on a council estate [I feel I have to defend it here as...
          08-12-2021, 08:45 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          As gordon indicates you need to consider it in three entirely separate parts, each have their own gain and calculation --

          The part YOU owned before Death 1
          The part YOU owned between Death 1 and Death 2
          The part you owned after Death 2

          Based on the values you give...
          08-12-2021, 05:52 AM
        Working...
        X