Whose right

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    Whose right

    Can anyone advise , please ? I'm completing my first ever tax self assessment (after advice from your good selves that it wouldn't be worth hiring an accountant to do ! ). I work part time ,one night per week as a night school teacher for 3 terms totalling 30 weeks work per year. In May last year I started to rent a house out that my mum left to me (I was advised that it would be better to wait until the market picks up and use the rent as a form of income as my earnings are so small do to job cuts). I hired an agent to rent the house out for me , etc. I am doing my Self Assessment - started today - and phoned HMRC for advice. They started to talk me through some of the trickier bits. One thing puzzles me, though . I was advisedaby HMRC about 3 months ago that I could claim tax relief on the agents finders fee ( £350 ) and the Electrical performance Certificate ( £75 ) as this was a tenancy that is renewd every 6 months - as opposed to yearly. Yet , according to the person I spoke to today , I CANT claim relief on it . Totally confused . Two HMRC representatives , yet 2 different pieces of advice over the same problem . Can anyone advise , please ? Thank you !

    #2
    Are you using HMRC form SA105 for declaring annual income from property ?
    ( you can download form SA105 from www.hmrc.gov.uk )

    Box 18 : 7000 annual rent income

    Deductable Expenses are entered in

    Box 22 - Council rates and insurance
    Box 23 - 75 EPC ( Repairs and renewals)
    Box 24: Interest paid on Mortage loan
    Box 25 - 700 ( Legal and letting agent )

    Comment


      #3
      6 months vs yearly is a complete red herring, no idea what they might have thought you had asked either!

      If you legitimately incur expenses for the purposes of letting out the property then they will *generally* be deductible against your rental income.

      EPC and letting agent costs are, without doubt, deductible.
      I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

      That also means I cannot share in any profits from any decisions made!

      Comment


        #4
        Thank you all for your replys ! Putting the finishing touches to the Assessment, I decided to phone hmrc again and explain my confusion. Was put through to the relevant team who double checked and informed me that I COULD claim for the finders fee and electical performance certificate . So my first assessment is done , dusted and paid !

        Comment

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        • 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
        • 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 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
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Thank you Gordon, didn't see your response this afternoon. I will look at this with fresh eyes tomorrow as it's late now.
          I've put some figures in my reply to a post just now but answers below to your questions.

          a] £80k Jan 2021 sale price.
          b] As property purchased before...
          08-12-2021, 00:55 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Andrew, apologies only just seen your post [was it awaiting approval did you say?] answers are:

          Purchased March 1982 as joint tenancy - so equal split of 33 1/3% each party
          Parent 2 died September 2007 - as joint tenancy I inherited their share - so at this point I own 100% of property...
          08-12-2021, 00:41 AM
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