Tax Return or Letter?

  • Filter
  • Time
  • Show
Clear All
new posts

    Tax Return or Letter?


    I remember there being a rental income limit where you don't need to actually complete a property tax return. Instead of completing the tax return you can write a letter to the tax office declaring the income and net profit. Is this still in practise?

    Also, if you do have to complete the tax return, does anyone know what the limit is whereby you can just total up all your expenditure as opposed to splitting it out?

    This info is for a friend who is just about to embark as a new landlord.

    Many thanks.

    When they contact HMRC to tell them they're starting a new business, HMRC will tell them how they want it reported.
    If it's trivial, they may collect the tax through PAYE and allow a simple adjustment at the end of the year, but normally they seem to default to asking for a full return.

    That was true a few years ago though and a couple of people have posted more recently that they've been asked to pay through PAYE.
    I don't see much incentive for HMRC not to want a proper return though.
    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).


      Originally posted by jpkeates View Post

      That was true a few years ago though and a couple of people have posted more recently that they've been asked to pay through PAYE.
      I don't see much incentive for HMRC not to want a proper return though.
      Yes, I agree with that statement.


        Hi Claymore
        Good to see you back posting on the forum.

        i cannot comment on whether that form of reporting to HMRC is permitted given that much reporting is in the main electronic, I feel that if allowed by HMRC the same would not be the case so far as any lender is concerned given the obligatory requirements of Self Assessments,Tax Overviews and Tax Calculations to demonstrate transparency of monies originating from Land & Property.
        An Accountant or indeed HMRC are suggested asa means ofclarification.


          Hi Loanarranger - how are you doing? Its good to be back again :-)


            Life is good , I am feeling like an agony aunt with clients seeking guidance on the implications linked to their property portfolios, no complaints as it demonstrates their support even if it isn’t income generating.

            I am glad you are back on the forum I missed our positive exchanges.


              Ha, bet you are. Lots of worried people.

              I haven't been totally absent, I have dipped in to read your threads quite a few times. Love your updates. Take care.


              Latest Activity


              • Rent aroom property relief.
                by calista
                Hi Qick Q i cant find the answer online..

                Can i claim rent a room relief on a rent of 300pounds a month at my first property where I live. 3600 a year.

                I rent a second property 1200 pcm, where I do not live and would not claim the rent a room relief- or rather i pay tax normally...
                31-03-2020, 12:10 PM
              • Reply to Rent aroom property relief.
                by calista
                Thanks for your reply, this is what i thought, but couldn't find anything on the government page to back it up.
                01-04-2020, 21:13 PM
              • S24 deduction of interest payment / Covid-19 Virus
                by Flashback1966
                I am wondering if S24 tax changes are going to come and haunt landlords.

                Under the tax changes landlords can't deduct interest payments in full. Individual Landlords have been paying more tax, then is fair.

                You could end up with a situation where the tenant wont or can't...
                01-04-2020, 08:06 AM
              • Reply to S24 deduction of interest payment / Covid-19 Virus
                by jpkeates
                I don't think that many landlords will pay any more tax, it'll catch some, but I'd have thought for the majority of landlords it's tax neutral.
                A small number of landlords will pay slightly more tax isn't much of a headline, though.

                At the time as s24 has been introduced, the personal...
                01-04-2020, 13:13 PM
              • Selling part share
                by Bill31
                5 years ago i gifted part of my property to my son as joint tenants. We lived in the property together. So its possibly a grob.

                Now we want to go our separate ways. Could he buy my share out so he owns the whole house. And i use the money to buy elsewhere. Could this introduce a IHT or...
                31-03-2020, 13:41 PM
              • Reply to Selling part share
                by Bill31
                Im sure the reservation relies on the person who made the gift.
                If we was to sell the property and take our 50/50 share of the sale price would that release the gift with reservation if we then went on to buy our own property
                01-04-2020, 12:27 PM
              • Reply to Selling part share
                by jpkeates
                The reservation will depend (as far as I can see) on who pays the running costs of the property.
                If the running costs are split in line with the ownership, it's one thing, if the property is run as though it was the mother's house with her continuing to pay all the bills is another.
                01-04-2020, 09:58 AM
              • Reply to Selling part share
                by AndrewDod
                Well if CGT was not payable on the first slice it won't be on the second.

                I don't see that you retained a benefit, but I can't find any case law to that effect. But if rent was payable it would have gone in both directions (you would have paid your son half the rent and he would have paid...
                31-03-2020, 18:19 PM
              • Reply to Selling part share
                by Bill31
                Interesting that it may not be a grob as we own it all together. But surely hmrc will view it as i retained a benefit.

                Its our only main property i dnt think any cgt will be due. I was asking will cgt be due if i make another gift or sell my share to get my name of deeds?
                I ask because...
                31-03-2020, 17:35 PM
              • Reply to Selling part share
                by AndrewDod
                Although they were BOTH living there and both owned it -- so the share gifted is probably not a GROB. It would be if only the OP was living there (owning only a portion) and not paying rent.

                It depends on the proportion - if the OP owned 1% and paid no rent - I think it would be in GROB...
                31-03-2020, 17:09 PM