Accountant advice needed for 2 co-owned properties

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

    Accountant advice needed for 2 co-owned properties

    I co-own two properties with my brother, which have both been rented out for approximately the last 5 years via two different letting agents. One is a house which rents for approx. £1800 pcm and the other is a flat which rents for approx. £550 pcm.

    The agents pay the money into one of my bank accounts each month, and when we need the cash I transfer some from this account to my spending account, and an equal amount to another of my accounts which I then transfer money to my brother from when he needs it.

    It has recently come to my attention that the agent for the house has been paying our tax for us at source, while the agent of the flat hasn’t.

    Throughout the entire period of renting, I have had no other employment, and my brother has been living and working in Asia, so presumably isn’t liable for any UK tax.

    I therefore surmise, that he is due a refund of tax paid at source on the house, and I may be liable for more tax on the flat.

    I would now like to get things on a sensible footing - put things in the hands of an accountant who can set up a Limited Company, establish a bank account for the company, and retrospectively sort out any tax owing or due for refund. Hopefully he will also be able to reclaim some costs of works and equipment that have been carried out on the premises over the years.

    I have no idea how much I should expect to pay an accountant for this work, and perhaps to audit the books once a year from now on. Could anybody suggest a ball park figure?

    I would also gladly accept any recommendations for a suitable accountant in the Essex/London region of the UK.

    Thanks.
    Last edited by Jargonaut; 23-09-2011, 17:15 PM. Reason: typo

    #2
    1. You do not want or need a company. It will cost you in fees.

    2. You do need an accountant to sort out this mess.

    Comment


      #3
      Oh dear.

      Go and speak to a few accountants to get quotes.
      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
        Best to do some homework first before contacting an accountant.

        Each brother has a gross annual rental income of 50% of 12 x ( 1800 + 550)pds which comes to about 14100 pds per year. The allowable expenses deductable against rental income is the letting agent fees plus buildings insurance (for house) and ground rent & service charge (for flat). If these expenses were ,say, approx 2100 , then the taxable profit would be 12000 for each brother.

        Each brother can claim a Personal Allowance for last year 10/11 at 6475 which leaves taxable sum 12000-6475 = 5525 and tax due at 20% = 1100 pds approx. So if the estate agent for house has deducted more than 2200 tax over the year, then there may be a refund due for each brother.

        So the taxable profit for each of the past 5 years must be calculated and a tax return submitted by each brother . The brother living overseas must register with HMRC as non-resident status.

        Comment

        Latest Activity

        Collapse

        • Reply to Inheritance tax Open Market Vakue
          by flyingfreehold
          even with an RICS' firm's valuation, if the valuers at HMRC think it low they will still challenge it. Ive just dealt with an estate the valuation date for which was during lockdown, and with extensive tenanted interests. The RICS firm arrived at their figure by a completely different methodology...
          07-08-2022, 18:40 PM
        • Inheritance tax Open Market Vakue
          by Bengt Lagander
          Is a red book valuation an "open market value"?

          the Red Book, the RICS manual for valuers, the open market value ("OMV") is the best price obtainable in a transaction completed on the date of death.

          Is this the correct definition please?
          07-08-2022, 11:33 AM
        • Reply to Inheritance tax Open Market Vakue
          by Neelix
          A written valuation for probate from an estate agent or 2

          then after it’s sold you need to declare the actual value it sold for
          07-08-2022, 12:54 PM
        • Reply to Inheritance tax Open Market Vakue
          by Gordon999
          For assessing property value for estate tax, you would approach 2 or more surveyor firms for their valuation and choose the one who gives the lowest valuation.
          07-08-2022, 12:45 PM
        • Stamp duty question
          by Kekdal
          Hi Gurus,
          I am trying to figure out if I need to pay the 2nd stamp duty.
          I am buying a property which would be my main residence.
          I currently live in a property that I pay rent for as a tenant.
          However I own another property which I had bought to live in and had paid the lower...
          03-08-2022, 09:53 AM
        • Reply to Stamp duty question
          by Kekdal
          Thanks everyone I took professional advise from a qualified lawyer who confirmed that in my case I can't enjoy a lower rate. I kind of knew the answer but was clutching on straws . My oversimplified interpretation based on his advise is: HMRCs logic is if you have more than one property you pay higher...
          04-08-2022, 09:18 AM
        • Reply to Stamp duty question
          by DoricPixie
          The manual is clear, Kekdal will not be able to claim a refund if the BTL is disposed of after purchasing the new home. I don't know the circumstances the other posters to which you refer but they cannot be the same as Kekdal's as they would not be due a refund.

          I don't think it would be...
          04-08-2022, 05:44 AM
        • Reply to Stamp duty question
          by jpkeates
          I used to believe that as well - the HMRC manuals are pretty clear about the situation in my view.

          Which made the surcharge rules a real trap for anyone who owned a let property (maybe for some years) and, who then wanted to buy a home of their own).
          But some people claim to have...
          03-08-2022, 13:42 PM
        • Reply to Stamp duty question
          by DoricPixie
          Kekdal won’t be able to reclaim the higher rate of SDLT. That only works when someone buys a new main residence whilst keeping the old main residence, pays the higher rate of SDLT and then sells the old main residence within 3 years of completing the purchase of the new main residence. Then a claim...
          03-08-2022, 12:57 PM
        • Reply to Stamp duty question
          by jpkeates
          It seems to depend on the timing.

          I used to think that if you owned another property which you let, you were just screwed, because of the second property thing (even if it was your residence you were buying).

          I've been advised otherwise, and that you would pay and reclaim....
          03-08-2022, 12:11 PM
        Working...
        X