Tax on Rental Paid a Year in Advance

by **steve234** on Tue Sep 20, 2011 10:18 am

HI

I am renting out my flat from 4 October for a year to a masters student, whos father has offered to pay the year's rent in advance to allay any concerns. How does this affect my tax position this year i.e. do I have to declare the 12 months recieved on a cash basis in this year, or is it the case that I only need to record the rental applicable to this year (6months) in the current year and then the remainder in the next for the period it relates.

Many thanks in advance.

regards

S

by **section 44** on Tue Sep 20, 2011 10:28 am

Is the payment really commuted rent or is it a premium?

Assuming that it is rent then you should follow the accruals, rather than the receipts, basis so that only broadly 6 months would be taxable in the current year.

by **steve234** on Tue Sep 20, 2011 3:46 pm

thx. what I was concerned about is at a later date if challenged..being told the 12mth payment should all have been recorded as income in the one year (even though 1/2 related to the next). thx