Net Loss & who should get taxed

[eurig]

Hi, Three questions.....

1)My wife has a house in her own name and pays her own mortgage. The house is let. As a married couple, is it ok for her to do a tax return as the rent is paid to her and mortgage paid by her or does it have to be shared?

2) During year 1, taking the allowable costs into account, the let made a loss of £737. In year 2, with the same tennants and therefore no agent fees etc, the let shows a profit of £2,027. Can the loss from year 1 be shown against the profit in year 2 and therefore require tax be paid on the difference only of 1290?

3) In year 1, the property was vacant and not advertised from April to July. Property was advertised in late July and tennant moved in 28th August. Can she claim water, gas, electricity and council tax for the period April to August?

Thank you.

[maths]

1. As the sole beneficial owner the income is all hers; only if you have a beneficial share then the income is split.

2. Yes. Income less expenses are calculated for a tax year on the accruals basis.

3. Yes.

[section 44]

3) In year 1, the property was vacant and not advertised from April to July. Property was advertised in late July and tennant moved in 28th August. Can she claim water, gas, electricity and council tax for the period April to August?

It would depend on when her property letting business began.

Why was the property not advertised for let prior to July?

If (for example) she had lived at the property, tried to sell it and then (by July) decided instead to let it then the answer would be no and she would only be entitled to deduct expenses from July.

[maths]

It would depend on when her property letting business began.

Why?

It would not be unreasonable to infer the business began on the day of the first letting and indeed pre-letting expenditure is potentially allowable.