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Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am about to let out a property and will therefore need to

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I am about to let out a property and will therefore need to pay income tax on the profit. I co-own the property 50/50 with a friend, who now lives abroad. I am still resident and am employed and pay tax via PAYE in the UK. My question is, in terms of declaring my profit, is it a simple case of halving the total expenses/ profit to arrive at the amount I need to pay personally? My co-owner's tax affairs would be based abroad even for any international income I presume. Thanks.

Thanks for your question

Yes, you declare the half share, so half the rents and half the expenses to arrive at an amount which represents half of the net profits on which you will be considered for tax.

However the individual resident abroad, also must declare their half share to HMRC, as this income arises in the UK, so remains liable to UK tax.


Customer: replied 4 years ago.
Thank you for that. It is what I thought. So to confirm, any income that is arrived at from the uk , regardless of residency, should be paid in the uk. Is that the general rule? The country of residency of my co-owner appear to be saying the opposite( possibly as they would like their tax contributions!) Also as the income will be rather low and I don't self asses is there a simple form to fill in to declare this income? Thanks a lot. Martin
Hi Martin

Thanks for your response

Yes that's correct - all UK income has a consideration in the UK, for tax purposes, and whilst there is scope to have some UK arising income paid tax free - for the tax then to be paid elsewhere, rental income is not one of those.

But your friend still needs to declare this income in his country of residence, but any UK tax suffered can be claimed as a credit against his foreign tax position.

And you will have to use the self assessment return - as whilst the income might be low at this time, it may not remain so - and unless HMRC deem that you can declare this on the simple declaration form - then self assessment is the way ALL your income (so your share of the rental income and all other income) must initially be declared.

You should inform HMRC as soon as the rental income commences - so they can arrange to issue you with the self assessment tax return after the first relevant 5th April



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