Personal tax PTX trick question n property income

tanyamarie

Could someone clarify which answer is correct?

Propery income £15,000 due may 11, recieved march 11 will be taxed in 2011/12 or 2010/10

uknitty

I thought it was based on the date due, not the date recieved.

Jo Clark

Property income is taxed as non-savings income and on an accruals basis which means that all rental income accruing in a tax year is taxed in that year. The date it is actually received is not relevant so should be 11/12 - 6/4/11 - 5/4/12

Why do you think it is a trick question?

reader

tanyamarie wrote: »

Could someone clarify which answer is correct?

Propery income £15,000 due may 11, recieved march 11 will be taxed in 2011/12 or 2010/10

Property income accounts should be drawn up on an invoice basis (not cash basis).

For example, if the £15,000 is due in May 2011, but received in March 2011, and relates to the period February 2011 - April 2011, then:

£10,000 relates to tax year 2010/11 (i.e. February and March 2011), and
£5,000 relates to tax year 2011/12 (i.e. April 2011).

So it's important to know what period the £15,000 covers, for example, if it covers June 2011 - August 2011, then the whole £15,000 would be taxable in 2011/12 (even though it was received in 2010/11).