Self Assessment on Rental Income for Property Jointly Owned

[anjo56]

Daft as this sounds now, I have been filing genuinely declared rental income/costs on my Self Assessment since 2009. Problem is the property is jointly-owned with my husband. When applying for a new BTL mortgage product, I was asked to submit forms SA302 confirming the rental income had been declared. I only produced forms relating to my own returns,so was asked why none for my husband. This is when I realised I had been doing things wrong. I do all the admin in our house so declaring the lot in my name seemed a normal state of affairs. I was told to contact HMRC and explain the situation and they told me to write in and explain and that I would have to resubmit my tax returns back to 2009 and that my husband would have to submit returns for this share back to this date also. I have written and await their reply but I am worried that there might be penalties for what was a stupid but genuine mistake. Can anyone advise what the outcome might be? We are both higher rate taxpayers so I am assuming the tax impact might be small. Is this right or naïve? Any penalties coming our way? Thanks for thoughts.

[bd6759]

I would write to HMRC explaining your error, with computations of your tax liabilities showing that there has been no overall loss of tax. Say that you will declare the income correctly for 2016-17 onwards. Ask for their agreement, which you can then show the lender.

The alternative would be your husband paying tax for all years from 2011-12 (6 years limit) with interest and penalties, and you getting a refund for years from 2013-14 (4 years limit). You really want to convince HMRC to accept your proposal.

[anjo56]

Many thanks for the advice.