SA first timer - advice greatly appreciated!

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

  • SA first timer - advice greatly appreciated!

    Hi,
    I am in the process of completing my first ever SA for '09/10 but it was a VERY complicated year for us – I have done our accounts and have researched IR website & this forum (fantastic forum btw). I do however have a few outstanding queries and assumptions I have made that I would really appreciate some advice on?

    In a nutshell.....we purchased House 2 (joint name), moved out of our first house 1 (in husbands sole name) and let it to friends, all exchanged on April 8. Husband then had job offer abroad so we moved out of the UK Jan 8. Husband left his employer for career brk, I went on maternity leave as heavily pregnant. House 2 was put on rental market immediately but was not however let until June. House 2 was empty and on rental market from Jan-May. We have completed our NRL & P85 and have been asked to self declare.

    The issues I am a little unsure about
    1) I plan to include on our tax returns a loss on House 2 (zero income offset by loan interest repaymts). I know there has been debate about this on the forum but I am willing to argue this.

    2) For house 1, we bought a few furniture items & paint etc at time of initial rental and know we cannot include these as expenses however – 3 weeks after property was rented out we had to replace the shower and shower unit due to a large leak (same standard). I want to include this as replacement expense. Could this be problematic?

    3) House 2 was professionally cleaned after we moved out (Jan 23) when house was on market, is this claimable?

    4) Gas & Electricty checks – which expenditure category do these fall under? Is it 'property expenses'?

    5) My tax return will only really include my PAYE info and the 3 mth loss on House 2 – is this loss to be carried forward to 2010/11?

    Any thoughts / comments on the above would be gratefully recieved, as you can see its been a heck of a year and I am now getting stressed as the time before my SA is due is short!

  • #2
    House two appears to not have entered your rental business in FY 09/10. Until it was let it was not in your rental business.
    Is house one rented out furnished and are you claiming the 10% wear and tear. It would initially sound as though the shower was already defective/worn out before you rented the property out. You could claim it but be prepared for questions from HMRC. Regards Peter

    Comment


    • #3
      House 1 is part furnished, hence no W&T allowance. I see your point about the shower...

      Regarding House 2, why should it not have entered our rental business? Surely a business is not only termed 'a business' when it starts to make money? PIM 2505 states that it is when the taxpayer 'begins' to exploit property for first time. Putting the house on the rental market with the property in a state ready for immediate tenants should constitute exploiting the property. We can provide evidence that the house was on the rental market from 8th Jan with the property vacant.

      Quote PIM2505 ["The question of when a rental business starts normally only arises, therefore, when a taxpayer receives income from property for the first time, or begins to exploit their land and property for a profit for the first time"]

      Thanks - jemmy

      Comment


      • #4
        I agree with you and disagree with Pete as to the time from which an interest deduction is due.

        Comment

        Latest Activity

        Collapse

        • First Time Self-Assessment: Help please
          Matt_J
          Hi All,

          I am in the process of registering for Self-assessment to declare the income and pay the tax on my property for tax year 16/17.

          I understand I don't actually need to do this until October 17 but I need to do now as I need to borrow against my residential mortgage, and...
          26-07-2017, 12:06 PM
        • Reply to First Time Self-Assessment: Help please
          jpkeates
          You don't have to submit receipts with the return, and, if HMRC are happy they're not necessary.
          If HMRC challenge the return they may ask for proof (which you won't be able to supply) - always get receipts or pay by some provable route.
          It's not happened to me in many many years of tax...
          27-07-2017, 18:18 PM
        • Reply to First Time Self-Assessment: Help please
          Matt_J
          Thanks for all the responses and advice guys, really appreciate it.

          In answer to your question JpKeates - I am the landlord and 100% of the income is paid into my account, which I then distribute/hold in trust accounts.


          Ok last question which I'm hoping some of your...
          27-07-2017, 15:37 PM
        • Reply to First Time Self-Assessment: Help please
          jpkeates
          No.

          Who is the landlord? It's not where the money ends up, it's who it's paid to that matters for income tax.
          Same issue with the trust - what you use the income for isn't important, it's who receives it....
          27-07-2017, 10:06 AM
        • Reply to First Time Self-Assessment: Help please
          tatemono
          what started out as fairly simple has now become much more complex. You need a dedicated tax accountant for this kind of complexity.

          That's because when filing self-assessment, you are liable for any errors. If you muck up, which I've done once or twice in over 20 years of filing, they...
          27-07-2017, 09:17 AM
        • Reply to First Time Self-Assessment: Help please
          jpkeates
          If you do the return now, HMRC will work out how much tax you owe - if you do it after the end of September they make you do it yourself (I think that date's right).

          Personally I pay an accountant to do the return and make sure I'm not paying too much tax. Costs me a few hundred quid (which...
          26-07-2017, 13:34 PM
        • Reply to First Time Self-Assessment: Help please
          AndrewDod
          Even if you could pay yourself (which you cannot) you would have to declare that payment as income and pay tax on it.

          Get decent tax software. I use Taxcalc.
          26-07-2017, 12:58 PM
        • Reply to First Time Self-Assessment: Help please
          Matt_J
          Sorry 1 more question as well. Do I need to work out my tax liability myself for the self assessment? Or do I just plug the numbers in the website and HMRC work out how much I owe?

          I am not self employed and pay 40% tax on the top end of my salary earnings via PAYE.
          26-07-2017, 12:36 PM
        • Reply to First Time Self-Assessment: Help please
          Matt_J
          Thanks for you response, I appreciate it.

          My question about the accountant fees was because I am a qualified CIMA chartered management accountant - but obviously not an expert in tax, hence my questions! So even if I am an accountant myself and could justify a rate, I still couldn't deduct...
          26-07-2017, 12:33 PM
        • Reply to First Time Self-Assessment: Help please
          jpkeates
          There no wear and tear allowance for the 2016/17 tax year.

          New tools are a capital cost rather than a revenue item - replacement tools might qualify, but in both cases have to be wholly and exclusively for the rental business, which isn't easy to prove if challenged.

          No, you...
          26-07-2017, 12:15 PM
        Working...
        X