I think the summary probably covers it, but if net rental profits of say £5000 are made, yet there is loss relief available from previous years of £4000, I appreciate tax must be paid on the remaining £1,000, but is there a requirement to submit a self assessment tax return, or is this covered by the "<£2.5k" exemption?
Thank you
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Well, you can ask HMRC if they'll make an assessment without the return but I think they'll almost certainly want a return, given that (presumably) there was one last year for the losses to be claimed.
Separate from the '£2,500 profit exemption' HMRC apply a further criteria. Is the income before expenses £10,000 or more? If so then they require a return.
Of course none of this is the law!
Based on the information given I'd probably just do a return for the year when there is a profit and show the prior year loss as a brought forward loss.
There was a ridiculous (and ridiculously long) thread in here in January in a similar note (pop "15/17" into Aweb's own search box and you'll find it straightaway).
In your case, you've said that there is tax to pay on the £1,000. So of course HMRC has to be notified. (And that's law, not just HMRC policy.)