But I’ve only got one little flat?
If you own one or more properties other than your main home and you rent them out, you have an obligation to declare any profits to the tax authorities.
What if I’m making a loss?
Even if you are making a loss each month, it is advisable to complete a tax return.
Because the losses can be accumulated and offset against any potential future gains.
At Steedman and Company, we have noticed a recent trend of individuals coming to us with their rental properties – sometimes portfolios – in varying states of disarray due to taking the ever popular ostrich approach to dealing with their taxes.
As well as locals and those around the UK, a simple case that crops up repeatedly is that of UK nationals living and working abroad who have kept their previous property at home in the UK and rented it out, e.g. someone who has gone to work in Australia for a year or two and has rented out their flat in Edinburgh.
Regardless of the earnings circumstances in the overseas country, a tax return must be filed with HMRC to declare the income earned from the rented flat.
HMRC have an annoying habit of issuing penalties to people who don’t submit their tax returns on time (£100 for initial late submission, leading on to £10 daily penalties after a short while) therefore, it is strongly advisable to have all the paperwork sorted out at the earliest opportunity.
If you think you fall into any of the categories above and need help completing your tax return or Land & Property accounting, give us a call on 0131 556 8595 or email us and we will take care of the full process for you.