I am in profession and need to resubmit a personal tax return for a client.
My client needs to restate his rental income in 2015/16. At that time a 10% wear and tear allowance was in place. The allowance was stopped in March 16 and a new relief for replacing furnishings were introduced
Would he be able to claim the 10% wear and tear allowance now when resubmitting his 15/16 tax return?
Replies (12)
Please login or register to join the discussion.
As Wilson says, you may have overlooked a more fundamental problem.
But, to answer the original question, entitlement to wear and tear is still there for 2015/16, if you can coax HMRC to re-open that return.
I wouldn't do it under the Worldwide Disclosure Facility. I'd do it under the Let Property Campaign.
Don't worry about any W&T election. Just base your calculations on the net amount after including W&T.
ALSO make sure there is an extra liabilty, after taking into account any Foreign Tax Credit, before you even begin to make a disclosure..
Thank you for clarifying. Reporting under the worldwide discloure facility (or let property campaign) is a little different from "resubmitting his 15/16 tax return"
What do HMRC suggest, and why? Has the foreign tax been deducted in accordance with the applicable DTA?
The foreign tax paid on the rental income was 10%.
Suppose it is possible to get a Double taxation relief for this foreign tax suffered.
Should the foreign tax be offset against the UK tax payable or should the foreign tax be entered as a deductible expense? It seems this is what HMRC suggest, in their communication.
There should be no problem claiming double taxation relief for a European country, or indeed most countries around the world, and it is better to adopt this approach than to deduct the tax paid as an expense. Just make sure you limit the amount claimed in the tax return to the UK tax due on that source.
p.s. no separate election required.
There should be no problem claiming double taxation relief for a European country, or indeed most countries around the world
Or, indeed, any country with no DTA via unilateral relief.