tax on let period during ownership of Property

Discussion in 'Property Tax and Accounting' started by Habib123, Apr 21, 2018.

  1. Habib123

    Habib123 New Member

    Hello,



    i'm thinking of potentially selling my property but before I commit to the conveyancing process with a buyer I think I may have a retrospective income tax liability as during the last 11 years of ownership I let the property out whilst living at my mum's house for 58 months during 2 separate periods. I've worked out the profit during both periods is £10,200.



    Will I be taxed on this when I go through the conveyancing process and will show up on the completion statement once the sale goes through ?



    thanks,



    habib
     
  2. Longterminvestor

    Longterminvestor Administrator

    I strongly recommend taking advice from an accountant with regards to your potential income tax liability. It may not be as straightforward as you suggest as there could well be additional costs which you can offset against rental income. I presume that you are living in the property at the moment as you do not mention the potential issue of tax related to 2nd home investments?
     
  3. Habib123

    Habib123 New Member

    I've spent some of my weekend going through my tax affairs. There are six tax-years concerning the 58 month period. I've also requested bank statements from HSBC as the account I had during the periods I let the property was closed down.

    I have tax calculations fro HMRC for two of them and I've requested copies for the other tax years. On average I made a profit of £1755 per tax year. so we're not talking huge amounts here. I read HMRC have authority to go back 20 years to claim back . I understand profit to be what's left over after collecting the rent and paying the mortgage and service charge. Is this the case ?
    undeclared retrospective taxes. Once I have the bank statements and tax calculations of the other tax years, I will have a clearer view on where I stand.

    There is no potential issue of tax related to 2nd home investments( well not that I can think of anyway) as I was living at my mum's house where everything is registered in her name.
     
  4. Simon_Misiewicz

    Simon_Misiewicz New Member

    There should be no impact on the sale but I would strongly suggest that you carry out the property let campaign to declare your income in the past:
     
  5. FWL

    FWL Member

    I dont see how the tax would show up on the property sale documents as this is a personal issue and not one connected to the property. Unless HMRC had some kind of call on the property to meet a tax bill, unlikely as they dont even know there may be a tax liability, this should not impact your sale in any shape or form.
     
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