Declaring Rental Property late

**Old Greg** · 31 July 2013, 20:00

Originally posted by BiggieBig View Post

I have a rental property which has never been declared for 12 yrs.

I'm not making excuses and I know it's wrong however the property has never made any profit from rental. In fact if I've calculated the 10% furnishing allowance I've made losses of a few thousand.

From last year it has started to make substantial profit which makes me nervous hence I would like to declare. I also understand that not declaring may work against me as I'm not able to carry over my losses.

I see I have a few options

a) Declare property from now and start paying tax on the profit
b) Seek advice from HMRC and declare property historically pay the fine and hope HMRC allow me to carry the losses over.

To make maters worse I've submitted a couple of tax returns without declaring the income/losses

Also who is best qualified to advice in such matter I guess an accountant would just advice to declare and help with the return. Is there any kind of 'Tax specialist' who could look at my figures and give me options..

I know less than nothing so someone can correct me, but I thought a fine could not exceed tax owed which sounds like zero.

**BiggieBig** · 6 August 2013, 11:48

who can I help me such enquires

Someone suggest I ring HMRC help line

Is there tax specialist who can help ?

**Pondlife** · 6 August 2013, 11:56

You were asking here last month about doing your SA DIY style because you didn't want to pay a professional £100 to do it, despite the complexities of money from closing your company.

You were advised then to spend the £100 on an accountant. IMO this is what you should be doing now.

**Old Greg** · 6 August 2013, 12:03

Originally posted by Pondlife View Post

You were asking here last month about doing your SA DIY style because you didn't want to pay a professional £100 to do it, despite the complexities of money from closing your company.

You were advised then to spend the £100 on an accountant. IMO this is what you should be doing now.

Maybe the two of us could talk him through it for £25 each?

**northernladuk** · 6 August 2013, 12:12

Originally posted by Old Greg View Post

I know less than nothing so someone can correct me, but I thought a fine could not exceed tax owed which sounds like zero.

<snipped>
Some threads I found say yes you have to declare even if you are claiming a loss and others say you don't have to. I bit cheeky to not declare a loss and then expect HMRC to back date it for you so good luck with that one.

At least you are now paying stupid tax because you cannot now offset the losses against the profit so you will in future be paying a lot more tax on the profits than you needed to.

Having a property myself I would also think you are doing something wrong if a 10% wear and tear pushes you into a loss as well, are you sure you are accounting for the mortgage INTEREST only... not the full amount of the mortgage?

**northernladuk** · 6 August 2013, 12:31

Originally posted by Old Greg View Post

I know less than nothing so someone can correct me, but I thought a fine could not exceed tax owed which sounds like zero.

Unfortunately after a dig about it appears you are right. There is talk about other penalties for deliberate concealment of income (even if it made a loss it is still income) but no specific figures.

It does also mention that they will take a lot more interest in your affairs once deliberate concealment is found which doesn't sound that scary but for a contractor I can imagine it is something to be avoided at all costs.

**eek** · 6 August 2013, 12:33

You have to claim that wear and tear allowance. You don't just get it and its going to be a bit late now.

Also how have you made a loss on the property? You haven't got a residential mortgage and been letting it out have you? The mortgage company will have a field day when they find out.

**MarillionFan** · 6 August 2013, 16:31

How is it mortgaged?
What was the interest?
What was the rent - interest? (This is the taxable bit)
What was your income during these years?
Was it your first principal property?
Who owns it? You or joint?
What is the capital appreciation?
What was the insurance?
Does the lender know?

**NCOTBAC** · 6 August 2013, 20:31

How come the property has all of a sudden become profitable??

Declaring Rental Property late