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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Question about rental income or rather lack of, we have

Resolved Question:

Hi - question about rental income or rather lack of, we have 1 buy-to-let now for 8 years but have not included it on the self-asses my husband does (property in joint names). just finished doing rental statement for each year & we have never made income, in fact in loss each year, but going forward should we include in self-assessment, even if making a loss? Pls help. Confused.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Rental income is chargeable to income tax.
You should have declared it to HMRC on your tax return albeit you have made a loss on it year on year.

As the property is in joint names, each of you should declare your share of the rental income/net profit or loss separately.

This would enable the losses to be carried forward and offset against rental income profits in the future.

You have asked what you should do going forward... my advice to you is -
- report rental losses of past years by writing to HMRC and submitting the rental income accounts for each of the years.
- as far as tax year ended 5 Apr 2014 goes, you can amend the tax return up to 31 Jan 2016 and it would not carry any penalty.

You may be charged fixed penalty for earlier years for non disclosure of rental income (albeit it it showed losses). You should make a voluntary diclosure under Let Property Campaign. More information on this can be found here

https://www.gov.uk/let-property-campaign

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 2 years ago.

I spoke with Let Campaign and they told me that if no profit wSs made previously I did not need to go thru them, just do self asses going forward??

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.

If you have already spoken with Let Campaign, then going forward I would still advise to prepare accounts for all years and carry forward the loss to future years to be offset against profits in the future.

You could still submit an amendment to your tax returns for 2013-14 (year ended 5 Apr 2014) and report the loss for that year and also record losses brought forward.

I will be happy to review your accounts for you.

I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes