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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4786
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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We moved the new house 4 years ago,we decided to let our 50:50

Customer Question

we moved the new house 4 years ago,we decided to let our 50:50 owned old house out for around 500pounds per month as we couldn't sell it,my husband is 20/40%tax payer and i am housewife,so we both agreed rental income all come to my account and single name on tenancy,we didn't know the form17 and didn't think we need inform HMRC the small rental income (each year net profit is less 2000 pounds )which below my personal allowance until i got letter from let property campaign.I told HMRC I will disclose it so they send me disclosure reference number and payment reference number,after calculation according income have to split to 50:50 with out fornm17 , I didn't owe the tax but my husband need to declare his net income .
so do i still send my disclosure form back even the due tax is zero?
Do I need to send HMRC the calculation as well?
does my husband needs to notify HMRC and gets his own disclosure reference number?
could he deduct 20-30% of his half income as the allowable cost which pay me as spouse agent to do all the letting for him?
many thanks for help
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

There are a few issues that have to be addressed here.

The fact you have completed disclosure form and calculated your share of income on 50:50 basis, your husband would have to do likewise for his share of the income and pay any tax due as a result.

You will have to send the disclosure back notwithstanding the fact no tax is due resulting from disclosure.

As you both own the property and share the income equally, you are taxed on profit made and any salary awarded to you is not allowable.

If the property was in his sole name only and you acted as his agent then any payment to you for services rendered would be an allowable expense against rental income and you would declare your income to HMRC by completing a tax return.

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.

Customer: replied 1 year ago.

Thanks for the reply,

Do I need sending the calculation spreadsheet to HMRC with the disclosure form ? thanks

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.

There is no need to send your working papers unless they ask for them.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4786
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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