Declaring rental income in Scotland

Declaring rental income in Scotland

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RichTT

Original Poster:

3,047 posts

170 months

Wednesday 28th January 2015
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With all this talk of tax returns etc. I've been having another look at my rental property. I'm pretty much sure I know the answer but I guess I have to ask the obvious questions.

On 15/03/2013 we registered my wifes old flat for rental with the Landlord Registration. This property was in originally in massive negative equity and on a Northern Rock Interest Only mortgage when we met. I transferred about £30k into the property from our own house to get us to the 70% mortgage level to negotiate a buy to let mortgage with our lender (Natwest).

From this point on we've been renting it out through a letting agent. I've been keeping a wee spreadsheet of my own just to tally everything up. The property is in joint ownership. My wife doesn't work and doesn't 'earn' anything beyond some cash I transfer to her individual account each month.

Our income from the property for 2013/2014 was £6k, minus deductibles it ends up at £572.88 profit split between the two of us. I was under the (false) assumption that below the £2.5k profit margin I didn't need to notify anyone. However I would appear to be in error. I take it that even though I'm now liable for a fine due to late submission for 13/14 I should go and get the P810 for and submit it as soon as possible?

What should I do for my wife? In theory she would get half the profit from the year, does she need to set up a self assessment account?

Also, whilst on the subject. Since my wife doesn't work is there any way to benefit from this situation?

Eric Mc

121,779 posts

264 months

Wednesday 28th January 2015
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Yes - both of you need to complete self assessment tax returns to cover your 50% share of the rental income.

It looks like you should be completing a 2013/14 tax return so you should get in contact with HMRC immediately so that you each get your separate UTR numbers to allow you to complete self assessment tax returns.

Where did you get the notion that there was some exemption for rents below a certain level? There isn't. In fact, you should even return rental income when the property generates losses.




Edited by Eric Mc on Wednesday 28th January 14:14

Brite spark

2,052 posts

200 months

Thursday 29th January 2015
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RichTT said:
Our income from the property for 2013/2014 was £6k, minus deductibles it ends up at £572.88 profit split between the two of us. I was under the (false) assumption that below the £2.5k profit margin I didn't need to notify anyone. However I would appear to be in error. I take it that even though I'm now liable for a fine due to late submission for 13/14 I should go and get the P810 for and submit it as soon as possible?

What should I do for my wife? In theory she would get half the profit from the year, does she need to set up a self assessment account?

Also, whilst on the subject. Since my wife doesn't work is there any way to benefit from this situation?
Would this help you avoid a fine for late submission, or not?

article said:
Of course, for those who are compliant, if you are in receipt of rental income, most taxpayers will need to report this to HM Revenue and Customs by 31st January 2015 via their 2013/14 self-assessment tax return. This must be filed online as the paper filing deadline has now passed. Any tax arising must also be paid by this date; there is no option to spread the payment via your tax code, as this deadline passed on 30th December 2014.
Seems you are not the only one [url]
http://blog.northwooduk.com/2014/12/ready-or-not-h...

RichTT

Original Poster:

3,047 posts

170 months

Thursday 29th January 2015
quotequote all
Well I've registered for my UTP. Some issues it seems with them allowing my wife to register. The Gov site is a real mess. Sending you links to archived articles and forms, or not finding the forms at the end of the links at all.

Still not sure whether it's worth finding an accountant to keep things in check. I'm also at the income level where apparently i need to submit self assessment even though i'm PAYE which I didn't know either.