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Is a tax return needed for this small amount?

Is a tax return needed for this small amount?

My mum used to be PAYE. She is now retired & jointly owns a property with my dad.

Her state pension is taxed at source.

The only other income she has is from the property, which I have worked out would be £257 tax owed in the 2011/12 tax year.

Does she need to register for SA and complete a tax return for this small amount? I have read the HMRC guidance which states you only need to do SA if your income from property is £2500 after allowable expenses (her share of the property income is £1285.32).

I can't believe that HMRC wouldn't want the £257 tax owed???! Can anyone enlighten me?



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By K81
02nd May 2012 14:01

You still need to advise HMRC of any income from property (IFP).

You state that your mothers state pension is taxed at source but this is not possible.

If your mothers only other income is state pension then she will need to complete a tax return as this is the only way that the tax due can be collected.

If your mother has another form of income which has a tax code then the IFP can be included in the tax code and any tax due paid through that source of income.


Either way you will need to contact HMRC.

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02nd May 2012 14:11

More info?

"Her State Pension is taxed at source" - I'm afraid it isn't. It is taxable though and will be deducted from her Personal Allowance which may be higher than the basic depending on her age. Is the property let furnished and if so have you included a deduction for Wear and Tear Allowance if it's more beneficial? You might find that her State Pension doesn't use up all of her Personal Allowance and the balance of that covers the Net Income from Property....

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By pauld
02nd May 2012 15:26

I would recommend

you write to HMRC ( letter to be signed by your mother) and advise of her circumstances. Include the following;

Mothers national insurance number and date of birth ( DOB applicable if over 65 during the 2011/12 tax year).

Total amount of state pension received in the 2011/12 tax year.

Rental income received for the year i.e. her half share of both gross rents and rent after expenses.

If the two above added together are below the personal allowance or higher personal allowance if over 65, then say so and state that there is no tax due.

Give estimate of net rental income for 2012/13.

At least then you have disclosed all the facts to HMRC. Its then up to them if they want to collect  the small amount of tax due.  It is possible however that they may issue a tax return, but you should state in your letter that you do not wish to register for self assessment and would prefer to pay the tax ( if any) direct.

If your mother is going to worry about it and nag you everytime she sees you about what to do, then at least writing to HMRC should help you both sleep easy at night !





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