Let Property Campaign - Disclosure

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    Let Property Campaign - Disclosure

    I am currently disclosing income from property for the last 10 years. I am self employed. I jointly owned property with my wife, who has died of cancer 2 months ago. We were seperated for the last 10 years - all the time we owned this joint property. All the income from it went to me to pay for mortgage from my account only, and profit (however small), went to me. My self employed income has been small and not even passed the personal allowance, so I have not had to pay tax because of low income for 10 years . . . . maybe only 1 or 2 years of it. The declared income would cause me to pay, including fines, around £5000 on my initial calculations if I allocated all the income to myself. My wife worked for a few years, but most of the 10 years was on benefits for job seekers, then sickness, then DLR at the end (due to cancer illness for years) and had housng allowance for where she lived in rented accommodation. She had no money in her estate on death. House was joint and passed to me by intestacy. My question is, as I am declaring all the income to make it all above board and straight with HMRC, if I allocated 50% each of the income, I would therefore pay no tax, or very little, as my business income was so small. My wife's 50% income from property would not make her reach her personal allowance. The big qiestion is: if income is 50/50 as its supposed to be, would the HMRC / Work and pensions start to investigate why she was on benefits for that time and look for some recompense on those years and can they make a claim against her half of the house, which is now passed to me as 'Joint Tenants'? Even though she never received any of the income or profit on a sale. Or .. . would it be better to say I received 100% income and then pay the tax myself - even though it should be 50/50 according to HMRC. If I go the 50/50 route as it should be, then I would pay no tax. I don't want to open a can of worms and make things difficult with this declaration. Thanks

    #2
    You might have to explain to HMRC why all of the income went to your account, particularly if the mortgage was in your sole name.

    With a potential £5k tax bill, I would have a chat with a local accountant who will charge a few hundred quid and do the job properly.

    HMRC penalties are based on their view of your openness and co operation, so you don't want to be caught out being clever when you're meant to be resolving the issue once and for all.
    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).

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