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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15933
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have been paying the

Customer Question

I have been paying the mortgage and receiving a rental income for a flat which is owned by my brother. I have been doing this for two years
The mortgage is more than the rent that I receive. I have therefore not declared it on my tax return as I was under the impression I was making less than I was paying
I have just been told by my mortgage advisor this is not correct and I am due a fine ... I obviously do not want to be breaking laws - please advise what the options are ? I am keen to get this all resolved as I am concerned it will affect my new mortgage enquiry
Thanks
Wayne ********
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. For a start, your brother should have been disclosing the rent and deductible expenses which include mortgage interest in a self-assessment tax return. Sooner or later, HMRC will probably learn that the property your brother owns is being let and will write to him about it. He should be disclosing the details even if he reimburses you with the rental income each month. You can use the tool here to determine whether you or your brother need to complete a tax return, though it is a good idea to do so since you can carry forward the annual excess of expenses over rental income if that is the case. If your annual net profit is £2,500 or more or the annual gross rents are £10,000 or more, you need to be completing tax returns. You could see if you are eligibkle to use the Let Property Campaign to get things straightened out with HMRC. If you are eligible, you can disclose the income and if there is any tax due, pay interest and a reduced penalty. Look here for information on that. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
I can see you have posted this question again. Answers take some time to prepare so you have to give some time to the expert. I don't have time to waste.
Expert:  TonyTax replied 1 year ago.
Clearing my list.

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