I have just taken on a new client and am having a TFI Friday moment.
Books and records have been passed to me and going through old accountants info I could do with some advice on the following: -
Client has several properties which are rented out and this is only income.
Old accountant has tax return showing self employment and property section completed.
Cant see why but the Balance Sheet of SE shows the properties as WIP with the cost price and improvements made.
Also on Balance Sheet are the mortgage balances.
There was a very small bit of work done on the side in the pvs year, which will not be repeated.
I thought the best way was to just produce a rental income and expenditure account showing income less repairs, insurance, interest, telephone etc. and that be declaredd on the Tax Return.
I presume that the old accountant has done the P&L and B/S which shows expenses on and a loss each year so that when the property
is sold they offset this against the profit and bring in the WIP as a cost of sale.
I thought you just completed the CGT section when selling a property.
Any pointers or advice on this would be helpful.
I am going home for a bottle of wine now.......hopefully the Friday head ache will have gone by Monday and I can look at this again.
Have a good weekend everyone and cheers