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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a very small share in a commercial property dating back

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I have a very small share in a commercial property dating back to when I was in partnership ( I'm now retired ).
The property is mortgaged and every year as the rent from the occupying continuing business reduces the mortgage my capital account increases accordingly. This is a paper transaction as until the property is sold ( something I cannot control ) there is no actual cash. In odd years , when rents exceed costs , some small payments to account are made.
I currently record the annual capital account increase in my tax return as income for tax purposes. Is this correct as logically then , if my capital account is ever paid out , the money would be tax free as I have been paying tax every year on my annual capital account increase ?
On any future sale of property I realise CGT would apply.
Thanks in advance , Tom
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for requesting I help you with your question. Please clarify for me...where on the tax return do you report this income. Income from property should be reported on supplementary pages SA105 UK Property.

You should also report losses to enable you to carry forward these to be offset against future profits from rental income.

You are correct that when capital is withdrawn at a future date there will be no more tax to pay on it. On future sale your share of the gain from sale of property would be chargeable to capital gain tax after allowance for gains annual exempt amount. I hope this answers your question.

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

Best wishes.