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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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hi I have been renting my house out to some friends for 3years

Resolved Question:

hi I have been renting my house out to some friends for 3years now until they can get a council property but the rent I charged them only covered the mortgage I was paying on the house I never intended to rent it out it was done as a favour realy so never thought anything about having to tell the tax man until someone told me but now the mortgage is paid up so don't know what to do
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

What is it you would like to ask me about this today please?

Customer:

hi been renting my house out for three years to friends but it only paid the mortgage so didn't think I had to declare it but the mortgage is now paid up don't know what to do

Alex Watts :

Yes I understand that.

Alex Watts :

What to do about what exactly though, I don't understand?

Customer:

will I need to tellk the taxman

Alex Watts :

Yes. You should have declared it. You would be required to pay tax on the difference between mortgage interest and rent received.

Alex Watts :

If you had a repayment mortgage then you would be paying capital as well

Alex Watts :

You dont get tax relief on capital just interest.

Customer:

yes but did not know

Alex Watts :

However in reality you could say you are renting from 5th April 2014 and submit it in this years tax return

Alex Watts :

It makes no difference whether you knew or not, you should have known as this is income

Alex Watts :

But if you get a self assessment return you can complete it this year.

Customer:

the rent only covered the morgage

Alex Watts :

If you dont call the tax office and ask for a return for the coming tax year

Alex Watts :

Whilst I am not saying you should lie to the tax man, it is unlikely he would look at anything beyond the previous tax year

Alex Watts :

The sums would be too small for him to bother about

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

no thanx

Alex Watts :

Can I help with anything else today?

Alex Watts :

Don't panic you can fix this in the current tax year

Customer:

no thanx

Alex Watts :

Ok, if I could ask you to rate my answer before you go today - the button should be at the bottom of the screen

Alex Watts :

If you need more help please click reply

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