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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15944
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am at present studying abroad, and have downsized my home,

Resolved Question:

Hi - I am at present studying abroad, and have downsized my home, which is my only property. I now want to rent this property to my daughter and her family at a below market rent. Does this have tax implications other than declaring this income on my tax form each year?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Let me take a look at this and I'll get back to you in a bit.

Customer: replied 1 year ago.
thank you
Expert:  TonyTax replied 1 year ago.

If you let a property at less than the commercial rate, you may still make a profit in a tax year and if you do that will be taxable income. Expenses are deductibe up to the level of the rent and any loss cannot be used in later tax years. Take a look here for information on property not let at a commercial rent. You should disclose the income and expenses in a tax return annually. You will be entitled to the personal tax allowance to offset against any profit you make. You can register for self-assessment by completing a form SA1 here.

You may have to pay CGT if and when you sell the property, notwithstanding the fact that it is your main home or will be if and when you live in it. Take a look at Example 9 in HS283 here where a house has been the main home of the owner and it has been let.

I hope this helps but let me know if you have any further questions.

TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thank you - I think that's all I need. I was a little concerned, because when I sold a property I had been renting to a friend at less than the market selling price to help her out, I was taxed £7000 because they deemed I'd sold it low for tax purposes, which was not the case. I didn't want to fall into a similar trap when renting to my daughter. I will check the link you have included.
Blessings.
Customer: replied 1 year ago.
I am not sure when I paid for your advice through Paypal just now whether or not I had started the 7 day free trial, which I don't want. I hope not.
Expert:  TonyTax replied 1 year ago.

Thanks.

I can't help you with your membership query I'm afraid. You should contact just answer customer services.

Expert:  TonyTax replied 1 year ago.

If you sell your property to a connected person, then market value will be used if the property is sold at less than its true value. That doesn't apply to rental income.