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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I lived in Qatar from August 2008 until June 2014, and did

Resolved Question:

I lived in Qatar from August 2008 until June 2014, and did not return to the UK except for short vacations at Christmas. During this period I earned a salary of approx £50000 a year. Also during this time in 2011, I bought a property for £125000 in the UK. I have never lived in the property and have rented it out for £550 a calendar month (about £440 after costs). I do not have a mortgage on the property. I do not plan to live in the property at any time, but am quite happy to hold on to it for the future. When I returned to the UK, I took a six month break from work. I have now secured a position in the UK (19 January 2015 onwards) and will earn £35000 a year. I really just want to know what my position is with the UK tax authorities. Will I have to pay tax on the rental income I have had since 2011, or just since I returned to the UK? Will I have to pay any income tax for the current tax year, since with my salary I do not think I will exceed the personal allowance? Really I know nothing about these things and would be so grateful for any advice. Kind regards, ***** ***** Sussex.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Your UK property income is chargeable to UK income tax and you should have reported it to HMRC whether you are resident in the UK or as non-resident landlord.

Having said that, as UK National you would be entitled to personal allowance as normal against your UK income and the profit would have been covered by the allowance and no tax payable.

You may be a penaltyfor late filing of tax return for the tax year 2011-12 and 2012-13.

You should register for self assessment now that you are back in the UK (if you already don't have a UTR number and report the rental income in tax year 2013-14 in Tax Return 2014.

If you have a UTR number then register at Government Gateway for self assessment and this would enable you to file a return online.

If the total of your salary and rental income in tax year 2014-15 is unlikely to exceed the personal allowance threshold of £10,000 then there won't be any tax payable.

More information on self assessment can be found here
https://www.gov.uk/personal-tax/self-assessment

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply...

Please advise how I can help you further. You asked these questions-

"I really just want to know what my position is with the UK tax authorities. Will I have to pay tax on the rental income I have had since 2011, or just since I returned to the UK? Will I have to pay any income tax for the current tax year, since with my salary I do not think I will exceed the personal allowance? Really I know nothing about these things and would be so grateful for any advice."

I have given you comprehensive answers to both your questions... rental income is chargeable to UK tax but you would be able to cover that by your personal allowance for those years.

I have also alerted you of fixed penalty for late filing of tax returns.

You have stated you know nothing about these things and would be grateful for any advice ... I have given you sound advice.

You are kindly requested to reconsider your rating. You may not wish to pay for the answer but your current rating is inappropriate and unjust.

Many thanks

Customer: replied 2 years ago.

Sorry I misunderstood the rating system. I had meant to say that the reply you gave me was excellent. My mistake. I have not been able to find a way to change it. Help?!

Expert:  taxadvisor.uk replied 2 years ago.
I will copy this message again and request you to rate it.

Thank you for your reply...

Please advise how I can help you further. You asked these questions-

"I really just want to know what my position is with the UK tax authorities. Will I have to pay tax on the rental income I have had since 2011, or just since I returned to the UK? Will I have to pay any income tax for the current tax year, since with my salary I do not think I will exceed the personal allowance? Really I know nothing about these things and would be so grateful for any advice."

I have given you comprehensive answers to both your questions... rental income is chargeable to UK tax but you would be able to cover that by your personal allowance for those years.

I have also alerted you of fixed penalty for late filing of tax returns.

You have stated you know nothing about these things and would be grateful for any advice ... I have given you sound advice.

You are kindly requested to reconsider your rating. You may not wish to pay for the answer but your current rating is inappropriate and unjust.
Customer: replied 2 years ago.

Thanks for being so understanding about my general thickness. Your answers are entirely what I was looking for and I am grateful. One last thing. When I file the tax return for this year, and declare the rental income, that covers me up to the period April 2014? Presumably I will have to file a separate return for every year I hold the property...is there a deadline for that every year (since you mentioned late penalties for the years 2011-2012, 2012-13)? But I will be taxed on my earnings now until April 2015 at full rate? Do I have to declare those as well? Sorry for all the questions. Can I claim back what I am overtaxed through until April 2015 (because by my reckoning I will only just go over the 10k allowance). How should I do this? OK no more questions after these! Thanks again.

Expert:  taxadvisor.uk replied 2 years ago.
Simon, thanks for your reply.

First of all, you would have to file a tax return every year and declare rental income by completing supplement pages SA105 - UK Property.

As you came back to the UK in tax year 2014-15, you will get full year personal allowance against earnings and other income chargeable to UK income tax in this tax year.

Deadlines for filing tax returns - Tax Year 2013-14
Paper return - 31 Oct 2014
Online filing - 31 Jan 2015.

I hope this is helpful and answers your question.
Customer: replied 2 years ago.

Thank you. So am I able to reclaim the extra I will have to pay before April 2015. By my reckoning I will be charged about 3k on PAYE (is that it?) but be liable for less since I have only about 15k earnings in the year. How and when can I claim that (if I can?)?

Expert:  taxadvisor.uk replied 2 years ago.

Simon,thank you for your reply.

Based on information provided, the first £10,000 of your total income will be tax free and the rest would be taxed at basic rate of 20%. If your earning and rental income are say £20,000 then your tax should be (20,000-10,000) 10,000 x 20% = £2,000.

You would be have a repayment of £1,000 in our example.

You would reclaim this when you file your tax return 2015... deadline

31 Oct 2015 for paper return and

31 Jan 2016 for online filing.

I hope this is helpful.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Thanks. But I will be overtaxed in the short-term (as a result of PAYE). How can I reclaim, and when?

Expert:  taxadvisor.uk replied 2 years ago.
If this is your only job this year, HMRC would most likely give you a tax code of 1000L and you would reclaim in every monthly payslip within current tax year.

You may have to pay tax on rental income when you file your tax return.

I hope this is helpful.
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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