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bigduckontax, Accountant
Category: Tax
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I am a quarter shareholder in a property partnership which

Customer Question

I am a quarter shareholder in a property partnership which i have an income from annually.
This year I have not received income from it as the majority shareholder will not issue it.
I can prove I have not received it.
Hmrc have sent me a bill for £2000, Am I liable for the tax on the money I have not received?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.

In a word, no, but hold, please tell me the year to which you refer. Do you mean the tax year or the calander year? Also to which tax year does the HMRC refer in their bill?
Customer: replied 2 years ago.

It's for tax year 2012- 13 and 13- 14.


We haven't received an income from the share for 2 yrs actually.


Can I take him to court?


Thanks Keith,


 

Expert:  bigduckontax replied 2 years ago.
If you did not receive any income how did HMRC think they could tax it one is tempted to ask. Are HMRC making, as they are very wont to do, assumptions that as you have declared rent in past years presumably you are still receiving a similar income?

If you did declare rent, but actually did not receive it you should write to your tax office to explain the error on your self assessment return and ask for same to be amended. If you did not declare rent then appeal HMRC's bill. You do that by letter. In my experience you may have to write several letters as they rise through the layers of management in the tax office until they reach someone who can get hold of the right end of the stick ie there is no income to declare. HMRC are past masters not only of getting hold of the wrong end of the stick, but frequently not being able to find the stick at all!

In simple terms if you did not receive rent you cannot be taxed thereon. By the way, you do not have to prove that you have not received the rents, it is for HMRC to prove that you did!

I am not a solicitor, merely an accountant. I would be inclined to send a formal bill for the missing rents and if the moneys owed are not forthcoming sue the person in the County Court without delay relying on the original partnership agreement which, presumably, does allow for these disbursements to be made. Watch this point carefully because it may provide a loophole for the other partner to refuse distribution. If in doubt consult a local, trusted solicitor, but remember if this is within the small claims court limits (10K) then it will be heard there and you do not normally receive costs in that tribunal. The CAB can help with both claims and support before the court with a trusted adviser. I see, though, that you have already been in touch with legal person and professional etiquette precludes me from treading on his toes!

I do hope I have thrown some light on your difficulties.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3114
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support. Debtors, a pain in the back side!

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