Rental properties are an area that there can be confusion as to the legal requirements.

Sometimes people believe that their property might not be making any money, so doesn’t have to be declared.

Unfortunately, this is not the case, and it could also be costing the landlord money as well as risking fines and penalties.

It is important to prepare rental accounts each year so that all income and expenses can be accounted for. Only then will you know which of your rental properties are in profit and which are operating at a loss. This information is important as to planning whether to continue with individual properties.
In addition, if a property is making a loss, this can be carried forward against future profits. If accounts and tax returns have not been prepared, then this is lost and as a result they could end up paying more tax.

When it comes to selling the property, sometimes people don’t realise that this has to be reported and could result in a capital gains tax liability. Additionally, they may miss expenses that they are allowed to claim for when preparing these calculations.

With HMRC cracking down on both these areas, now is a good time to seek professional advice and bring your affairs up to date – you could even find that you have rental losses to carry forward and reduce future tax bills.