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Category: UK Tax
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UK Tax Law - flat rentalI rented a flat to tenants from 2003-2010

Resolved Question:

UK Tax Law - flat rental
I rented a flat to tenants from 2003-2010 (part of the family house). This was land registered in my name at the land registry.
My wife handled the rental - dealing with agents, inventory, repairs etc.
She claimed tax relief. And in some years we claimed tax relief jointly.
My accountant says he didn't know that the property was in my name. He believed that it was held jointly.
Can my wife claim tax relief?
Submitted: 12 months ago.
Category: UK Tax
Expert:  Rakhi Vasavada replied 12 months ago.
Dear Friend,

Hello and welcome. Thank you for using Just Answer.

I am afraid, there is little mess that you have created. Being the owner of the property, technically speaking your wife cannot accept the rent. Also she cannot claim tax relief.

I am sorry to be the bearer of bad news. However, since you did not did not deal with the tents, you will not be able to claim the tax relief. Further to this your wife too will not claim it unless she is the joint owner, which she is not.

I am sorry, but your accountant is correct. The only way you can rectify it in future is to handle the rent yourself and claim reliefs on your taxes.

Hope this helps.

Please rate this positively if this helps as this is the only way we get credit for assisting you. Alternatively, feel absolutely free to revert with further queries.

Warm Regards....
Customer: replied 12 months ago.

This is barely literate.


Is this the tax law in Baroda?

Customer: replied 12 months ago.
Relist: Answer quality.
The answer was barely literate.
The question was a uk tax question.
The person who answered 'qualified' as a lawyer
in Baroda??
Expert:  Sam replied 12 months ago.

Hi

 

Your question has now been transferred to the UK tax section, would you like me to proceed with your question

 

Thanks

 

Sam

Expert:  Rakhi Vasavada replied 12 months ago.

Dear Friend,

 

If I have missed out on any aspect, or if I have misunderstood your question in any way, you could have come back to me with that rather than negatively rating it.

 

Anyways, I am opting out so that other expert can assist you with. Sorry for inconvenience caused.

 

Warm Regards

Customer: replied 12 months ago.
Relist: Answer quality.
I responded to this question.
The person described as an "expert" was a lawyer answering a tax question.
Can I choose an expert to answer a UK tax question?
Expert:  Sam replied 12 months ago.

Hi

 

I do apologise, your question had been transferred to the UK tax section, and then was taken back by the UK property law section.

 

I am a UK tax expert, would you still like to proceed with this question.

 

Thanks

 

Sam

Customer: replied 12 months ago.

Hi Sam,


Yes please.


 


Mark

Expert:  Sam replied 12 months ago.

Hi Mark

 

Sadly your wife cannot claim tax relief, as the property was held in your sole name, so all rental income and associated expenses should be claimed through your tax position.

 

This will need revisiting for the earlier tax years (if HMRC have not already identified this as an issue) and although the tax liability, will result in a refund on your wifes tax, this then can be used to cover the liability on yours. (of course if your rate of tax is higher than your wifes then this does later matters)

 

My advise - is it possible if you transfer this property into joint names, then for married couples, the joint ownership is treated as the whole period of ownership, then you only have to concern yourself with the years when she solely declared the income, to rectify theses to 50:50 share.

 

Sadly the fact that your wife did all overseeing and management of the property, and and another solution your accountant should have proposed is that she was paid for all the work she clearly undertook.
How the accountant can argue he thought the property was in joint names, when all paperwork would have suggested otherwise, and that he sometimes allowed her to declare all income and other years made this a joint declaration, seems a bit odd to me, so another factor is whether you have any redress against the accountant for his mismanagements of you and your wifes tax affairs.

 

Do feel free to ask any follow up questions, I can see that you did not have a good response initially, but if you could rate the level of service I have provided, it would be appreciated !

 

Thanks

Sam

 

 

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12769
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and other UK Tax Specialists are ready to help you
Customer: replied 12 months ago.

Sam,


To clarify, work carried out by my wife is allowable for tax relief?


 


Mark


 


 

Expert:  Sam replied 12 months ago.

Hi Mark

 

Yes it would have been, at the time, but take care if you now make a claim as "wages" for her, from the income that you have to declare.

 

Thanks


Sam

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