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| *Loan,banking and credit>>>tax advice |
UK Tax Question - advice please!? |
My husband and I have 2 buy-to-let proprties, both have tenants in. We are considering getting a third. At present, we do not declare the 2 properties as they do not make money (we have to put money towards the mortgage, insurance, etc each month). Should we be declaring them anyway with the tax people?? We've had lots of conflicting advice off people. Getting our third property depends on the answer to this really! Thanks in advance. You should be declaring them as you are receiving income in the form of rent. The inland revenue (or revenue and customs as they are now called) don't care if you ar making a profit - but they do care if you have undeclared income. You will be able to off-set the mortgage payments so you will not pay much tax, just like a business off-sets costs against turnover. Get some advice from a good accountant quick as failing to declare tax could incurr fines, back tax bills and added interest. I believe you should be declaring the income, but you will be able to offset any costs which may result in no tax being due. You should declare this income, even if you are not making a profit, because one day some jealous person will come along and split on you to HMRC. Don't forget that only mortgage INTEREST is allowable against the rents, not the whole of the mortgage payments. Ex HMIT If you start a company for your buy to let business then there are a lot of tax breaks available for future purchases so as other answerers have said,yes,you must declare to the tax man.You will find that the tax office can be very helpful and not the monsters they are made out to be.A good accountant is a must too in order to save you a lot of money and their fee is set against tax too. |
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