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£1000 property Allowance

Does he need to include his rental profit share

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Client who has one rental property shared equally with his wife.  /They have changed the beneficial interest interest and resulted in the husband share of the rental profits has fallen below £1000.

With the £1000 property allowance does he still need to include the profit share in his personal tax return ? Probably not but just want to make sure as cannot find any exclusions for husband and wife apart from formal partnerships.  I had thought this new allowance was designed to take individuals out from self assessment but my client would still need to complete tax return as he earns more than 100K

 

 

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20th Jan 2019 23:27

JimLittle wrote:

my client would still need to complete tax return as he earns more than 100K

I bet you can’t find that requirement in the legislation!

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to Tim Vane
21st Jan 2019 06:41

Although with the PA restriction kicking in at that level it's not a stupid conclusion.

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to Tim Vane
21st Jan 2019 08:36

Agree. There's a good chance it'll be in the legislation through one of the other provisions - such as he owes some tax.

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By Matrix
21st Jan 2019 00:19

How much is his share of the rental income since isn't this the pertinent figure?

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to Matrix
21st Jan 2019 12:08

Its 1% which is £12o

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21st Jan 2019 08:39

Anyway, the answer is yes, he does. He needs to enter his gross rents and tick the Property Allowance box to claim the £1000 (max) allowance.

On Taxfiler, it's near the top of the Property section. Just below Gross Rents.

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21st Jan 2019 16:59

"I had thought this new allowance was designed to take individuals out from self assessment"

AIUI, it has two facets - the one you mention for those with a gross property income not exceeding £1,000 and a way of simplifying / rounding expenses up to £1,000 for the others.

The Property Allowance is based upon Gross Income, not Profits.

Was it worth the effort to bullet-proofedly frig ((c) PNL) that 50/50 to 1/99?

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to emanresu
21st Jan 2019 17:18

emanresu wrote:

"I had thought this new allowance was designed to take individuals out from self assessment"

It might take some folk out. It might leave others in.

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to lionofludesch
21st Jan 2019 17:59

lionofludesch wrote:

emanresu wrote:

"I had thought this new allowance was designed to take individuals out from self assessment"


Surely you mean
emanresu quote-d the OP:
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By Matrix
21st Jan 2019 23:05

In answer to the question, I believe it is an exemption rather than an allowance which has to be claimed. So he does not need to prepare a tax return solely to declare the £120 rental income and claim the exemption. If he already completes a tax return then of course the income should be disclosed.

If you call the SA helpline then they will check their checklist and say he will be required to complete tax returns since he earns more than £100k (although if they ask whether he meets any of the criteria and you say No then it may work). Ironically he may be taken out of SA once you have submitted this tax return if no additional tax due. I had quite a lot of these last year.

It is not ideal for tax agents since, if there is any non PAYE figure to report (savings income, pension tax relief etc.) or checking tax codes, then we are not receiving the annual tax return fee for sorting it out.

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28th Jan 2019 18:53

Did they submit a form 17 to elect to treat the income in a different ratio to 50/50?

I was researching the property allowance this morning and my conclusion is that if your rental income is less than £1,000 and the property allowance applies, you don't need to mention it even if you submit a tax return.

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to Tomazaan
28th Jan 2019 22:11

Oh.

Makes you wonder why the boxes are on the return, doesn't it ?

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to lionofludesch
30th Jan 2019 08:33

So that you can claim the allowance if you have rental income of, say, £1,200.

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to Tomazaan
30th Jan 2019 09:52

Fair point

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