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Where Taxpayers and Advisers Meet

Married couple and property income tax nightmare.

Monnty
Posts: 3
Joined: Thu Aug 30, 2018 9:15 pm

Married couple and property income tax nightmare.

Postby Monnty » Thu Aug 30, 2018 9:24 pm

Hi, bit of a headache, wife and I own some properties, some individually, some joint. Joint are just down the middle.
We do the tax returns with just one of us. It's actually the higher earner who does the returns with all income declared from all properties however the non payer is now under investigation for non payment despite the fact that the payer probably paid more tax than works be due if it was all split. It was done this way because we had no idea it was an issue provided everything was declared and paid for.
Were at a bit of a loss of what to do for the best?
Can anyone help please?

SteLacca
Posts: 419
Joined: Fri Aug 07, 2015 2:17 pm

Re: Married couple and property income tax nightmare.

Postby SteLacca » Fri Aug 31, 2018 9:39 am

Have you explained this to the enquiry officer at HMRC?

wamstax
Posts: 1832
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
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Re: Married couple and property income tax nightmare.

Postby wamstax » Fri Aug 31, 2018 9:48 am

Ok so cutting to the chase the Non-declaring spouse has a bit of a problem in that clearly that person must have known that tax was due on the income from property and yet did not declare the source and income for tax purposes.
It is not free from doubt given that some properties might be solely owned and therefore not be chargeable on the high earner.
Yes there may well be mitigating circumstances but there is a problem that needs to be fully reviewed and you really need to get matters reviewed by someone with experience and can present it in best possible light with HMRC. Why would you pay more tax than you should have and clearly do it knowingly?
regards and hope this helps
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Monnty
Posts: 3
Joined: Thu Aug 30, 2018 9:15 pm

Re: Married couple and property income tax nightmare.

Postby Monnty » Fri Aug 31, 2018 10:37 am

It is as is. All income to the same accounts, expenses as a whole rather than trying to determine which property had what spent etc.. Milage collective and treated as a family /individual unit. The difference in wage thus tax liabilities I assume would be minimal.

So is it considered worth going direct to hmrc or to an accountant?

robbob
Posts: 2621
Joined: Wed Aug 06, 2008 4:01 pm

Re: Married couple and property income tax nightmare.

Postby robbob » Fri Aug 31, 2018 11:15 am

How far are we going back here ?

You can potentially amend your returns to where they should have been, if your income needs reducing to compensate for allocations to spouse.

Probably best to quantify the adjustments by tax year , let the tax officer know that there will be similar adjustments to your returns and perhaps pose the question if anything tax neutral can be left as it is?

https://www.gov.uk/self-assessment-tax-returns/corrections


I would say it is important here that you should review what has been submitted for you, if you have made any errors on your returns ignoring the wife/you splits then it is highly likely this will be picked up on, so if there are other issues probably best to highlight anything there may be in that regard - rather than let hmrc "uncover them"

Probably best to at a minimum get a review of your calcs if you have any doubts as to how and what should have been claimed and when.
So is it considered worth going direct to hmrc or to an accountant?
You may get away with a compromise solution if you are lucky perhaps a quick chat with the tax inspector explaining where you are will give you an initial indication of how they would like to proceed. I would be surprised if they don't immediately ask for full correct calculations split as they should have been compared to how they were split with relevant computations of how tis would pan out tax wise with all adjustments in place. Basically until you do the full tax calcs you don't really know what the tax consequence is.

Monnty
Posts: 3
Joined: Thu Aug 30, 2018 9:15 pm

Re: Married couple and property income tax nightmare.

Postby Monnty » Sun Sep 02, 2018 9:12 am

Thanks, speaking with an accountant next week.
We are happy with the calculations, although clearly we're hardly an authority on the matter. P60 will show the high earners consistently being higher and so we will see what develops next week.
Recalculated figures may be a bit of a headache asking the will also include the expenditure. Going to be interesting remembering what was spend on which property.... Good job we take alot of photos and an accurate log of milage and destination.


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