How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I have the house I live in with my partner and jointly own

Resolved Question:

I have the house I live in with my partner and jointly own worth around £35k. I also have a flat worth around £186k 120 miles away which I own with a buy to let mortgage of
F £100k, my partner has an 'interest' in it of £40k. I have let it for 2 year shrug an agent and have just started a third let, til now I haven't declared it as I didn't realise it was unearned income til a friend told me, now I'm really worried that If/when I inform the tax office I will get a big back dated bill.

We both receive a pension, mine is about £21k plus state pension. The rent is £750 pm. I pay the flats mortgage of around £100 pm plus 130 maintenance, agent fees of 150 and 30 pm insurances. What would you advise..or should I sell the flat as it seems the market is good...?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me what your partner's annual income is please. Would you also let me know your dates of birth and confirm that you are not married.
Customer: replied 2 years ago.
This is a civil partnership and my partners do bis may 1954, teachers pension of £18k, although there is a current query about having received pension while working ('teaching') in a university to support her mother with dementia til she died. So having to repay the pension what she currently receives is £1200 pm less than that. No state pension of course as yet.
Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Customer: replied 2 years ago.
Ok. Does it come here...or on an email?
Expert:  TonyTax replied 2 years ago.
The answer will be here and you will be notified by email.
Customer: replied 2 years ago.
I have to go out shortly for a couple of hours unexpectedly I hope to still be able to see the reply on screen when I get back...and I will also do the rating so pleased don't think II'veforgottenmto do it.
Expert:  TonyTax replied 2 years ago.
There is quite a bit to write so my answer will be here when you get back. I have a little still to do. You don't need to rate my answer until you are happy that all your questions have been answered.
Expert:  TonyTax replied 2 years ago.

Hi again.

Rental income is taxable. Take a look here for more information on that. I'm afraid that you have left yourself open to the possibility of tax based penalties for your failure to disclose and for late payment of any tax which might be due. You can read about those here and here.

You need to complete a tax return if your rental income exceeds £10,000 per annum before expenses (your share) or £2,500 after expenses (your share) as you will read here. You can in certain circumstances choose to have any tax payable collected through your tax coding if you have a PAYE source of income which you both do but this may not be possible for the years that you have missed disclosing the income for. Therefore, you both may need to register for self-assessment which you can each do using Form SA1. You can also register online here.

If I were you, I'd complete an income and expenditure account for each tax year that you have let the property and divide the income between you and your partner. A property owned by a married couple or those in a civil partnership will be deemed to be owned on a 50:50 basis unless it is actually owned in proportions other than 50:50 and a completed form 17 is lodged with HMRC. In the absence of such a declaration, the income will be split 50:50 for tax purposes which may or may not be to your advantage depending on the level of your respective incomes.

Before you register for self-assessment, I would suggest that you send your rental income statements to HMRC with a letter explaining the situation and making your apologies. As many people have been in the same situation as you and your partner as regards ***** ***** HMRC have a procedure they follow which doesn't always require the completion of tax returns for earlier years. They simply assess the tax due, along with any interest and penalties. Penalty charges can be appealed against as you will read here.

HMRC may ask questions before they get to the point of calculating any tax liabilities. If you run into a particularly officious or difficult HMRC officer, you might consider asking an accountant or a tax adviser to handle the matter for you, for a fee of course.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
I have just found your reply which popped after the follow up I sent. You didn't mention whether you think I should sell the property. As a mater of interest, does the tax office get landlord information direct from letting agents..?
Expert:  TonyTax replied 2 years ago.
I'm not allowed to give advice as to whether you should sell your let property or not. That's a completely personal decision. What I would say is the amount of Capital Gains Tax that you might pay is influenced by the level of your other income in the tax year that you make the gain, if any. The lower your income, the lower the CGT you would pay.

HMRC can ask letting agents for information on property lettings if nobody appears to be disclosing income from a property which is let. They have access to many databases. Many people have been contacted by HMRC many years after a property was first let. They invariably catch up with people who have not disclosed rental income. I have dealt with many cases where people have asked me for advice in such circumstances. I always tell them to come clean with the tax office befoire the tax office finds them.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.