I have a new client who runs a shop..
Along side the shop she has decided to let out her primary residence, this being jointly owned with her husband. She is a 20% tax payer, he is a 40% tax payer. Can the Income be declared solely as her Income or does it have to be let jointly?
Having moved out of their home, they will be renting another property to live in and renting out rooms in this at the weekend on a bed and breakfast basis. They are both on the lease agreement. She will be running the weekend business. Again can the Income be declared solely as hers or does it have to declared on both tax returns?
This is my first question on Accountingweb.. Thank you,
Mel H.
Replies (12)
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Have you actually made any attempt to research this? HMRC's website will give you the answers. It's pretty basic stuff so should you really be offering advice? Have you insurance etc. etc.
hi Mel,
the answer is (a) no, but there might be something you can do about it, and (b) possibly if you do it right.
However the questions do suggest you are greener than my grass after all the rain this month. Do you have the relevant training and experience to offer tax return services?
It's a question that comes up about once a week so the answer is available on here with little effort.
Oh come on. For all you guys know, Mel might have 20 years experience but never have had this come up before. I know I haven't, so my memory on how it works is hazy.
As a first time poster on the site, y'all know how to make a girl feel welcome.
Hi Mel, welcome, I can't remember offhand unfortunately, but hopefully some of the more generous members on here can point you in the right direction.
Really?I can't remember offhand unfortunately...."
C'mon, what is it gives rise to the income? Is that a question that has to be remembered?!
If it's a joint property, it's joint income. If it's a sole trade's activities (eg a shop), it's the sole trader's money (even if the shop's owned jointly). So... what about B&B? Is that income from property (a bedroom) or income from cooking? (I seem to have made an assumption about the second B there!)
Dude, I'm on maternity leave. Ask me a question about playdoh, Paw Patrol and playgrounds, and I'm your gal. Ask me a tax question I've not had to answer since my exams, and I will honestly say I don't know.
You can elect to split the income share so it's not 50/50 but I can't remember exactly how, I'd have to look it up (probably based on actual % ownership but again I wouldn't like to assume - because it's been 6 years and 40 months of not enough sleep since I last officially looked at that).
Does the fact that the wife is running the B&B on her own, but that it's a jointly rented property with the hubby, make a difference? Good question, couldn't remember offhand - thanks for answering that one.
So, yes, really. Mummy brain is a thing. Now, I need to go and rescue my child from some buttons and excess glue...
Does the fact that the wife is running the B&B on her own, but that it's a jointly rented property with the hubby, make a difference? Good question, couldn't remember offhand - thanks for answering that one.
There was a time when HMRC was tempted to argue that one 'B' was income from property while the other 'B' was a trade.
Mel, as well as the form 17 links other have provided, check out https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4300#... on that B&B point. The temptation is no more. (If you miss it first time through, it's under "Whole activity a trade".)
Have a look here as a start
https://www.gov.uk/government/publications/income-tax-declaration-of-ben...
And Jennifer Adams' AWeb article here:
https://www.accountingweb.co.uk/tax/personal-tax/property-tax-form-17-ge...