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Where Taxpayers and Advisers Meet

tax on letting out property

ehab563utd
Posts:1
Joined:Sat Oct 24, 2020 10:24 pm
tax on letting out property

Postby ehab563utd » Sat Oct 24, 2020 10:33 pm

Hello,

Apologies if this is inside the wrong topic.

I'm looking to find out if/how much I should pay tax on a property and how to declare it.

My sister and I own a property that was gifted to us. We rented out that property since owning it and have never lived in it at any stage. The rental income goes into a shared account between my sister and I. The interesting part is that she no longer lives in the UK as she moved to Europe some years ago. I, however, have always lived here and we both hold British citizenship.

How do I know if I should be paying any tax? If I do pay tax on it then I'd like to know the following:

- Is it part of capital gains tax or a further income tax?
- presumably I have to backdate it too is this correct?
- how does one even calculate this?

Many thanks in advance

TaxAntics
Posts:1
Joined:Sun Sep 13, 2020 5:03 am

Re: tax on letting out property

Postby TaxAntics » Mon Oct 26, 2020 6:21 am

Hi, HMRC provide a let property campaign to enable the disclosure of unreported property income. Rents received less allowable expenses (insurance, repairs, legals, services etc) is subject to income tax. CGT is payable on uplift from probate value if you sell. If you want a chat through or need help with sorting the tax issues out, feel free to contact me (jerome@taxantics.co.uk). Good luck!

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: tax on letting out property

Postby pawncob » Mon Oct 26, 2020 6:29 pm

CGT will only become due when you sell it, and the gain will be the value of the gift (not probate) deducted from the sale proceeds less expenses.
You don't give a time scale, but you only need to use the HMRC disclosure scheme if you're several years behind.
With a pinch of salt take what I say, but don't exceed your RDA


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