BTL Advice

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six port

Original Poster:

277 posts

165 months

Thursday 14th November 2019
quotequote all
A few threads on the go here already I see which has me thinking I need to sort my affairs out as well!
Moved in with my fiancé late April 2018 and rented my old place out as it seemed the wise thing to do.

It's now time to submit my tax return and I wondered if there were any PH recommendations ie fixed cost service for a pretty basic return, not comfortable doing my own this time and have a lot of other things going on at present.

Also need some advice on whether to keep it or get out with some remortgage ideas.

Would I need a financial advisor or accountant?

Bit dumb in the respect as I didn't really plan on having a property let.
Some of the risk involved it being a older property that will need some money spending on it in the coming years doesn't sit well with me but don't want to look a gift horse in the mouth by wimping out currently have two family members who want it if I sell but don't think they know the landlord responsibilities or tax burdens.

98elise

26,366 posts

160 months

Thursday 14th November 2019
quotequote all
Is very very simple to do on your tax return.

All you need is totals for rent received, mortgage payments, repairs. Insurance, agency fee's etc.

I can't remember the actual boxes but it's along the lines of the above headings.

It really is that simple.

So

26,271 posts

221 months

Thursday 14th November 2019
quotequote all
98elise said:
Is very very simple to do on your tax return.

All you need is totals for rent received, mortgage payments, repairs. Insurance, agency fee's etc.

I can't remember the actual boxes but it's along the lines of the above headings.

It really is that simple.
It's not actually that simple for the reason I've highlighted

dazwalsh

6,095 posts

140 months

Thursday 14th November 2019
quotequote all
Do you not know what your mortgage payments are?

six port

Original Poster:

277 posts

165 months

Thursday 14th November 2019
quotequote all
Yes I have annual mortgage statements which show interest and capital paid

dazwalsh

6,095 posts

140 months

Thursday 14th November 2019
quotequote all
You take your interest amount and stick it in one of the boxes and hey presto.

romeogolf

2,056 posts

118 months

Friday 15th November 2019
quotequote all
So said:
98elise said:
Is very very simple to do on your tax return.

All you need is totals for rent received, mortgage payments, repairs. Insurance, agency fee's etc.

I can't remember the actual boxes but it's along the lines of the above headings.

It really is that simple.
It's not actually that simple for the reason I've highlighted
What exactly makes that complicated? You get an annual statement from the bank to say how much interest you've paid, and if you're on interest-only, then it's simply a case of keeping track of all mortgage payments.

six port

Original Poster:

277 posts

165 months

Friday 15th November 2019
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Does it tell you when you're doing it what you can claim back for interest that year?

romeogolf

2,056 posts

118 months

Friday 15th November 2019
quotequote all
six port said:
Does it tell you when you're doing it what you can claim back for interest that year?
It does the calculation for you. It asks what your interest was, and then works out how much of it is deductible. As of next year that's 0% anyway.

Condi

17,085 posts

170 months

Saturday 16th November 2019
quotequote all
Are you PAYE?

If so, then many people forget to submit one at all.


Not advocating it, but it happens.

rufusgti

2,528 posts

191 months

Sunday 17th November 2019
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Condi said:
Are you PAYE?

If so, then many people forget to submit one at all.


Not advocating it, but it happens.
Condi it would seem is correct. I am PAYE and have done my self assessment for property every year I've had rented property. But I work with quite a few who don't. And have seemingly got away with it for, in some cases that I'm aware of 15 years plus. Many years ago I told them they were going to get stung. But I'm actually now begining to think they really won't.

I don't know or care how the system works. I just presumed they would flag up on a land registry/council tax type system but it would seem these systems either don't exist, don't work, or nobody really cares.

Either way I fill in my return and sleep sound which works well for me. But everyone has different attitudes to risk, and nobody likes paying tax.

alfabeat

1,102 posts

111 months

Sunday 17th November 2019
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And if caught, it would be a rather large amount of tax to pay! Plus penalties plus interest! I'd rather sleep easy at night. Don't mess with HMRC!

Killer2005

19,594 posts

227 months

Sunday 17th November 2019
quotequote all
Condi said:
Are you PAYE?

If so, then many people forget to submit one at all.


Not advocating it, but it happens.
Happens quite a lot too.

Sarnie

8,025 posts

208 months

Sunday 17th November 2019
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Killer2005 said:
Happens quite a lot too.
Also whats happening now, with BTL applications, is that lenders are no longer just asking for bank statements for proof of rental income........some are now requesting Tax Returns to evidence declared BTL income.........and where it says nil = decline.

Edited by Sarnie on Sunday 17th November 23:17

Killer2005

19,594 posts

227 months

Monday 18th November 2019
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Sarnie said:
Killer2005 said:
Happens quite a lot too.
Also whats happening now, with BTL applications, is that lenders are no longer just asking for bank statements for proof of rental income........some are now requesting Tax Returns to evidence declared BTL income.........and where it says nil = decline.

Edited by Sarnie on Sunday 17th November 23:17
We've just started doing basic rate tax payer cases so started to see that happen now. Not declined any just yet but I can see it happening.

rufusgti

2,528 posts

191 months

Monday 18th November 2019
quotequote all
Wow. That's interesting. it always occured to me strange that lenders would go to the extreme of affordability checks, which in my opinion are easyily falsified and don't give any real detail to the profitability of a btl. Where's the tax return shows much more. I've never heard of them asking but now you mention it, it makes a lot of sense.
What happens when a landlord starts getting denied. I get the impression, once say a decade into btl, it's then a very risky business filing a tax return.

TeaNoSugar

1,229 posts

164 months

Monday 18th November 2019
quotequote all
rufusgti said:
Condi said:
Are you PAYE?

If so, then many people forget to submit one at all.


Not advocating it, but it happens.
Condi it would seem is correct. I am PAYE and have done my self assessment for property every year I've had rented property. But I work with quite a few who don't. And have seemingly got away with it for, in some cases that I'm aware of 15 years plus. Many years ago I told them they were going to get stung. But I'm actually now begining to think they really won't.

I don't know or care how the system works. I just presumed they would flag up on a land registry/council tax type system but it would seem these systems either don't exist, don't work, or nobody really cares.

Either way I fill in my return and sleep sound which works well for me. But everyone has different attitudes to risk, and nobody likes paying tax.
Surely the sting comes if/when the colleagues you’re referring to come to sell the BTL property? How would they explain the large lump sum incoming funds from selling a property? There would be CGT to pay on that too. That must raise some alarms within HMRC?

romeogolf

2,056 posts

118 months

Tuesday 19th November 2019
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TeaNoSugar said:
Surely the sting comes if/when the colleagues you’re referring to come to sell the BTL property? How would they explain the large lump sum incoming funds from selling a property? There would be CGT to pay on that too. That must raise some alarms within HMRC?
You can own a second property and not rent it out, but they would need to declare for CGT (which I believe is done by the conveyancer handling the sale in any case).

mikeiow

5,285 posts

129 months

Tuesday 19th November 2019
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romeogolf said:
You can own a second property and not rent it out, but they would need to declare for CGT (which I believe is done by the conveyancer handling the sale in any case).
Theoretically, they could move into it for 6-12 months, declare it as their main residence (perhaps whilst tidying up to sell?), & sell with no CGT.
I would imagine HMRC might get 'interested' - 'flipping' is not allowed....in theory.......but who knows these days....
https://www.thisismoney.co.uk/money/mortgageshome/... has some recent detail around this

anonymous-user

53 months

Tuesday 19th November 2019
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If you're thinking of forgetting to pay your taxes don't forget HMRC can play "join the dots" by looking at your stamp duty filings. It's very easy for them to see exactly what you own and where.