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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15606
Experience:  International tax
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Hello hope you can help, I have worked abroad for 3 years and

Resolved Question:

Hello hope you can help, I have worked abroad for 3 years and rented out my house, am very worried as I've received a letter from HMRC, I didn't think I had to pay tax on the rent as it didn't cover my mortgage, can I be find for this? Also if my mortgage a month was £861 and the rent was £550 a month what should I have paid in tax. Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
Do no tbe too upset abou tthe situation, this happens and you will not be fined but you do need to addres sthe nonreported rental.
Unless a landlord is registered with HM Revenue and Customs (HMRC) the property agent is obliged to deduct basic rate income tax from net rental income and remit this tax to HMRC. If there is no agent the Inland Revenue have powers to collect basic rate tax from the tenant. At the end of the income tax year a self assessment tax return form must be completed by the landlord in order to reclaim any tax overpaid.
For EU citizens, a Personal Allowance can be deducted from the profit before the tax rates are charged.
Careful records should be kept detailing all income together with deductible expenses, such as mortgage interest, insurances and repairs/maintenance.If your income is less than theexpense you would not hav etax to pay but you must register with HMRC to request that the income not have tax taken and remit before it is paid to you.
You will need to get the past 3 years returns compleetd showing the income and teh expeenses you are allowed. If no income after expense then you will not have tax to pay.
Customer: replied 3 years ago.
Would I be best getting an accountant to help with the back dated tax from the rent, once I've contacted HMRC to inform them I was posted to Germany and that the house was privately rented.
Expert:  TaxRobin replied 3 years ago.
Yes, I would advise that you receive professional assistance in completing those. They can also help in completing teh request to have the rent not taxed (or withheld by the tenent).
All should work out fine.
Expert:  TaxRobin replied 3 years ago.
Rating lets Just Answer know I assisted you and credits me for my time.
Customer: replied 3 years ago.
I need to get thins in my head, if my mortgage a month was £861 and the rent was £550 a month and the mortgage interest was around £540 a month ( think I got that right), what should I have paid in tax if any. Thank you
Customer: replied 3 years ago.
I need to get thins in my head, if my mortgage a month was £861 and the rent was £550 a month and the mortgage interest was around £540 a month ( think I got that right), what should I have paid in tax if any. Thank you
Expert:  TaxRobin replied 3 years ago.
Hi,
Generally, you can claim the running costs of your letting. Allowable expenses may include:
  • rents, rates, insurance, ground rents etc
  • property repairs and maintenance
  • renewals - although you cannot claim these and capital allowances or the 10% wear and tear allowance
  • interest and other finance charges
  • legal, management and other professional fees
  • costs of services provided, including wages
  • other property expenses

You can cliam the interest so that would leave you with £10 a month or £120 for the year. Your tax free allowance would subtarct from that and there would be £0 income so

£0 tax. That does not mean you can forego filing each year though.

You must file to receive the benefit of subtracting teh expense,

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