Non-resident joint owner, now a landlord

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

    Non-resident joint owner, now a landlord

    Good morning. My mother passed away in February 2020. Her property was jointly owned by her and myself, my half being signed over to me by a deed of variation when my father passed away in 2004. I had nothing to do with the maintenance or running of the property. Mum lived there alone, and paid all the bills and for any essential maintenance. Consequently the property was liveable, but looked tired. It needed freshening up before I could even consider taking in tenants. So after clearing the house of all personal possessions, we performed a mini-refurb, which consisted of ripping out carpets and built in wardrobes, and then outside, dismantling its dilapidated outbuildings (shed and greenhouse) which had truly seen better days. This was all disposed of by a professional waste management company.
    We then set about decorating inside and out, replaced the old soiled carpets with new LVT, updated the electrics (new modern fuse box, additional sockets/new faceplates, replacement light fittings etc.) and general tidying up (new door knobs, door hinges, kitchen kickboards etc.). Nothing really out of the ordinary. Our first tenants occupied from October.
    I now have to complete my self-assessment for 2020/21. Whilst I have, through this forum, a good understanding of what is allowable in terms of expenses, and am able to make those decisions, I guess my main area of doubt is around whether the fact that I was previously a joint owner has any bearing on this, and also where the line is drawn between my mother’s estate being responsible for some of the costs. Clearing personal possessions – I would say her estate – but the fixtures and fittings (wardrobe, outbuildings etc.) – I am saying the rental business. The waste management bill would of course have to be apportioned accordingly along these lines.
    I’m also thinking about the costs to get the property ready to let - incurred to make the property suitable for tenancy. I am seeing them as pre-rental costs, and therefore allowable, but then doubt myself as I was a joint tenant. I am probably overthinking all of this, but is there any reason why any of this this should make a difference? Thank you.

    #2
    Were you joint tenants or tenants in common?
    What did the tile deeds show after the deed of variation?
    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


      #3
      Thank you for the response. We were joint tenants, which was reflected on the title deeds.

      Comment


        #4
        In which case, when your mother died, you became the beneficial owner at that point (the title records will probably be updated later as the estate is settled).
        So, as long as none of the work was done when your mother was alive, the business is entirely responsible for the costs and the work carried out.

        When a new property rental business begins is the first day of the first tenancy, so all of the operational costs / allowable expenses are treated as being incurred on that date.

        This is my understanding of the situation. and how I'd complete the return personally.
        It's possible that there's some special rules about this situation, but I've never come across them If there are.
        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
          That is entirely logical, and makes perfect sense. Sometimes, I think you just need to throw things at a wall, and see what and how they bounce back. Overthinking definitely isn't good !

          Many thanks for taking the time to reply !

          Comment

          Latest Activity

          Collapse

          • Tax implications of remortgaging home for a deposit on a BTL
            by Jerry777
            Hi

            I would be grateful if anyone could help with this query.

            I am remortgaging my home to raise a deposit for a BTL property, and I wondered when I submit my SA tax return, if I would be entitled to a tax credit for the interest on the residential mortgage in the same way as...
            20-06-2021, 18:58 PM
          • Reply to Tax implications of remortgaging home for a deposit on a BTL
            by Gordon999
            You should keep some documentary evidence to show the mortgage loan money raised on house was applied towards purchase of the BTL property.
            23-06-2021, 05:05 AM
          • Reply to Tax implications of remortgaging home for a deposit on a BTL
            by jpkeates
            Yes, provided the loan is for the purposes of the business, it's a business expense.
            22-06-2021, 08:53 AM
          • Reply to Need CGT help or do i ned an accountant
            by Gordon999
            I suggest you send a letter by recorder delivery :

            Tax Ref: xxxxx xxxxx

            Dear Tax Inspector,

            I am the owner of a btl property at 88 Garden terrace , Toy Town .

            I wish to inform you that my rental tenant stopped paying rent in Sept 2019 .
            ...
            20-06-2021, 14:18 PM
          • Need CGT help or do i ned an accountant
            by Sara2
            Mother died in 2007 left house to me and my 2 sibs it was family home and i lived in it until 1985 when i had my own house. My brother also lived in house at point mum died and he remained there until 2010 when not being able to sell the property i purchased whole of property by buying brother and...
            13-06-2021, 11:53 AM
          • Reply to Capital Gain Tax on main home, but let in the past
            by Gordon999
            The first period used as main residence is 3 years plus 9 months after moving away. The second period as main residence is 2 years.

            So out of 10 years ownership , the total capital gain is apportioned 5 years plus 9 months as "main residence and 4 years and 3 months under rental...
            20-06-2021, 14:05 PM
          • Capital Gain Tax on main home, but let in the past
            by Gep
            Hi all,
            I'm thinking about selling my flat and trying to workout how much capital gain tax I would have to pay.
            ​​Accordingly to the HMRC website the rate is 28% if you let the property out, but I'm currently living there so I'm not sure.

            I've owned the property for 10 years:...
            18-06-2021, 17:32 PM
          • inherited house - best to sell or rent
            by Wobble1
            Hi all,

            My father sadly passed away in February, I already owned half of his house as tenants in common via my mothers will (passed several years before), although I didn't live there with him. Have my own house nearby. I am sole beneficiary of his will, and as well as everything else,...
            17-06-2021, 20:32 PM
          • Reply to inherited house - best to sell or rent
            by Gordon999
            If you want to keep both houses and rent out one house, you should visit 3 local estate agents and make enquiries with lettings manager :
            to check out the following info :

            1. What is the rental demand for property in your district or street area ? flats or houses ? furnished...
            20-06-2021, 13:57 PM
          • Reply to inherited house - best to sell or rent
            by Gordon999
            1. If you decide to sell father 's house now, the capital gain will come mainly from your own half share .

            If the capital gain on your half share is around £50K , the cgt tax may be around £50K less £12K allowance = £38K at 18% = £7K .

            The capital gain on the half...
            20-06-2021, 13:32 PM
          Working...
          X