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Out of curiosity- property rental question

What would happen if someone owned properties to rent out with two separate people

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Hi. I’ve been studying tax on property rental, and thought of a scenario I didn’t know the answer to. I know if two people jointly rent out a couple of properties the income and expenses for both properties can be lumped together and offset against each other, but what if one of those people (call him a)  also owned a property or two with someone different (call them c) ? I’m assuming the expenses and income for those properties (owned by a & c) would need to be kept separate to the properties owned by a &B as the joint owner of those properties (c) would only be needing the details of the profit/loss in those properties for their tax purposes. Would a then declare all the income from all the properties he owned (both jointly with b & c) on one land and property page and he could include his half of all income and expenses lumped together and therefore offset all income/expenses against each other even if owned with different people? Sorry if that sounds confusing but I don’t know why it’s bothering me so much!!! Many thanks if someone can satisfy my brain!! 


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10th Dec 2018 08:11

Personally I try not to aggregate rental income and expenses from multiple properties together, preferring to prepare a separate P&L for each. It avoids any issues such as you have described.

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10th Dec 2018 08:51

Sorry just to clarify- do you mean l&p (as in land and property) pages- so multiple land and property pages? Could you not just do separate property income computations I.e person a’s Contains income and expenses for all properties, person bs contains just the properties they own etc. Just where properties are owned jointly- not where a partnership agreement is in place and it’s considered a partnership.

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10th Dec 2018 08:56

Sorry just re-read what you put and think I misunderstood. So if you kept expenses per property separately and had say a column in the property income statement per property, and person a had say 5 properties, person b had 2 properties, and person c 3 properties in each of their income statements, would it be acceptable for person a to then aggregate the 5 properties on his stamens to complete one land and property page in the tax return with the total income and total expenses from his property income statement?? Sorry this is so waffley!! I can’t think how to explain it clearer!

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10th Dec 2018 08:59

Your confusion seems to stem from the fact that you are conflating the accounts and the tax return. The two are entirely distinct.
First prepare accounts for each property. Sometimes accounts may be prepared by a third party.
The accounts will provide a share for each owner for each property (or group of properties if properties under the same shared ownership are combined).
The tax return for any individual owner can then be completed accordingly. There can be only one L&P page on the tax return.
The above assumes that none of the properties are held in partnership, in which case the approach for tax return purposes is entirely different.

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10th Dec 2018 09:21

Yes thank you- you have put what is in my head much clearer than I have explained it. So the share of person a’s two groups of properties are then combined on his one land and property page. So if he made a loss in the properties owned with person b, and then a profit on the properties he owned with person c, they would be combined and consequently offset against each other on the land and property page. This is how I imagined the scenario to work but wasn’t entirely sure. Many thanks

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By Jholm
to puds2015
10th Dec 2018 12:55

Property 1 - profit =£1,000 - 50% stake - £500
Property 2 - profit £250 - 100% stake - £250
Property 3 - loss (£1,000) - 50% stake - (£500)

The total taxable property income for the year would be £250. This assumes no mixture of FHL UK and overseas etc.

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