First time self assessment calculation before submittnig?

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    #31
    Many thanks JP

    It is probably a no, but are you able to claim as an expense a mortgage set/arrangement/deal fee...which was added to the mortgage?

    On 2009 the paper work it shows advance of 140k, mortgage completion fee £2.5k, insurance fee £30.00 and telegraphic transfer fee £25.00 which made the amount £142,555.00 total.

    Since this I have either paid the fee or opted for a deal without depending.

    Just made me think this seemed odd?

    Comment


      #32
      Any fees associated with the loan are allowable, and subject to the 20% "cap".
      Essentially they're costs of the finance, which is what's allowable - interest is only the most common one.

      Strictly speaking, you're meant to amortise the fees across the duration of the loan, catching up if you terminate it early.
      I have never met anyone who actually does this (including me).
      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


        #33
        Yes, exactly the same.

        As it is unfurnished, I suppose the £1000.00 non itemised wouldn't work for 2009 onward? Not sure of the correct name, on the self assesment form I completed for 2019-2020 you chose to give an exact figure for itemised expenses, or no-itemised, dont know when this was introduced?

        Comment


          #34
          I thought I would give HMRC a call, not a good idea, two 30 minute waits and the staff didn't seem to know what I was talking about!

          I since read it is called a tax free property allowance of £1000.00 per year, which I am guessing you would use if your expenses were much lower? Was there something like this pre April 2017 as understand this is when it started.

          The second question they didn't know about was claiming the mortgage set up fee's and she said 'you can only claim interest' which you cant now anyway!

          For my previous years, do I list the fee's (paid up front and added to mortgage) as an expense or include them in the mortgage interest payments?

          Many thanks

          Comment


            #35
            Never talk to HMRC about your tax.
            They're not on your side when it comes to tax.

            And, as you've found, aren't actually specialist unless you're very lucky.

            You can't claim the £1000 allowance as well as mortgage interest and other expenses, it's an either or.

            I don't think there was an equivalent pre 2017.
            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


              #36
              Thank you JP, actually is there a donation I can make towards this site/forum as I feel I should?

              It turns out there is more than one year the house has not made a profit as I am trailing through all the figures!

              For starting at year June 2009 - March 2010 it was

              Income £8950
              Mortgage interest £6523.51
              Expenses £3762.75 (EPC, inventory, agent fee, mortgage fees, gas certificate)
              Total - £1336.26

              For 2010-2011 the only expense I know of is landlord insurance and the minus from the previous year, I guess a common scenario?

              Comment


                #37
                The years with losses will help offset those pesky for tax years with profit.

                Make sure you carry all of the losses forward even if they occur in sequential years.
                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


                  #38
                  Originally posted by Advice seeker View Post
                  Thank you JP, actually is there a donation I can make towards this site/forum as I feel I should?
                  It’s a forum to ask for advice and help others (or have friendly disagreements sometimes) so the best donation you can make is to help others on here if and when you can or at least give an opinion. JP and Gordon both helped me out a while back when I was having some difficulty understanding some aspects of my tax return so I felt it only right that I should help you with yours when you needed it. It also gets your own brain working when you try to give a bit of advice.

                  Comment


                    #39
                    Originally posted by BTL investor View Post
                    It’s a forum to ask for advice and help others (or have friendly disagreements sometimes)
                    I agree with this and the rest of the post.

                    The advice given is sometimes wrong (mine included), but usually is corrected by someone else quite quickly, and the knowledge and experience increase.

                    Most people seem to use the site searching for answers, I assume, to problems and issues that they face - currently (Thursday morning) there are currently 301 users online. 20 members (who can post) and 281 guests (who can'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


                      #40
                      Yes this makes sense, I just felt I should at least offer.

                      I really do appreciate your help, advice and understanding.

                      Hopefully this thread can help someone else along the line.

                      It is all a learning curve, which I am enjoying, dare I say!

                      Comment


                        #41
                        Originally posted by Advice seeker View Post
                        It is all a learning curve, which I am enjoying, dare I say!
                        Learning all the time myself.
                        And just when you're pretty confident you're right, the goalposts move.


                        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


                          #42
                          I am almost there with my figures now. Works out about 9k odd, plus 10% penalty and there is interest :/ so am hoping 10k roughly.

                          Would be interested in your opinions actually as a business model or whatever you want to call it...

                          Over the eleven years since I started the let in 2009, there have only been three occasions when it was empty between tenants. I think I have been quite lucky with my tenants who have looked after it reasonably well and maintenance costs low, with some £££ spent between changes.

                          There were two years where I was about £1k the wrong way and I carried this forward as an expense to the next year.

                          As an average figure over the whole time, it works out to around £2900.00 per year, profit, after tax. I have no idea is this is good, bad or indifferent?

                          As an option, I didn't know where I stand with CGT etc..., if, I decided to sell. Purchased in 1999 for £50k, stood empty/uninhabitable for 10 years (long story!) and then spent around 20k on full renovation in 2008 and started let in 2009 until today where I would guess it is worth 350/375k maybe. Can anyone advise?



                          Comment


                            #43
                            You sound to have about £300,000 in gain, spread over 21 years, with 11 of them in a business.
                            You can feed the values into any CGT calculator around, but the CGT is likely to be £40-44k.

                            The longer it stays in the business, the lower the proportion of CGT will be (but the gain may be higher).

                            The property and business model seems odd.
                            That's a colossal gain, and the annual profit sounds terrible.
                            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


                              #44
                              Thanks JP, good to know.

                              Does it make a difference I have never actually lived there?

                              In a nutshell, was family home, to keep certain over sentimental family members happy, it wasn't touched for ten years, literally, until the council threatened a forced purchased. Even when rented at £895 and then £950 pcm rental with a £645 then £473 mortgage, to keep family members happy I didn't increase the rent for six years (I know!) in the hope the tenants didn't move out, which explains the rubbish profit. Lots of lessons learned here!

                              Now rented at £1075 with £168 mortgage so hoping this starts to balance out.

                              The longer it stays in the business, the lower the proportion of CGT will be (but the gain may be higher)

                              Sorry I didn't understand this part, I know I should speak to a qualified adviser, but does this mean I am better to hold onto it, or sell it?



                              Comment


                                #45
                                Originally posted by Advice seeker View Post
                                Does it make a difference I have never actually lived there?
                                Yes. If it was always an extra property, you'll pat CGT on the entire gain.
                                Which sucks.
                                Sorry I didn't understand this part, I know I should speak to a qualified adviser, but does this mean I am better to hold onto it, or sell it?
                                It makes no difference, because of the other answer in this post.

                                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

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