Basic details: parent owns own home (own name not joint) and is now sectioned under the MHA since 2014, No mortgage left on the property.
Daughter has LPA in place.
Property, although un-occupied to date, council tax bills etc have been paid by the mum. Possible intention that the mother may return to the property at some point. Bills paid from money saved in the bank account,(by the way in case you wished to ask).
As the mum has now been sectioned, she receives no state pension (stopped being payable once she was sectioned), or any other personnel pension or taxable income.
Now the property is due to be rented out from say Jan 18. The rental income being circa £650 PCM. This naturally gives an annual gross rental income of £7,800, being less than the personal allowance.
I am aware that if net rental income is more than £2,500, then you have to register with HMRC for income from property, under SA.
Yes, I understand that this is the rule, but it is a bit daft (you could say many things are daft where HMRC are concerned) as the overall outcome is no taxable liability. More work for nothing and an additional cost to the potential client.
Having thought about it, I would get the daughter to write to HMRC with a copy of the LPA and ask for exception to filing a SA under this situation. Cannot see a reason for her to file a 64-8 (agent)? More so as the mother cannot really complete a CWF1 either, (as in a signature).
Last time I looked at something along this line. You were allowed 3 years renting of the property before it became not your main residence and then was not allowed the PPR.
Plenty of time before the rental income has to be declared, just wanting to get things in place I suppose.
Any guidelines would be helpful.