Help completing first self-assessment

mrb82
mrb82 Registered Posts: 147 ? ? ?
Happy New Year everyone!

I have been asked by my uncle-in-law to complete his self assessment and also his wife's self assessment.

I have a couple of questions to clarify my understanding (I have passed the personal tax exam so am allowed to complete a self assessment).

1 - As a married couple, they have property income. Who's SA would this go on?
2 - Do I need to put their employment income on so that their basic rate threshold may be amended by the tax already suffered through PAYE (they're high rate earners)
3 - One of the properties they have been renting out for many years but have not declared it to HMRC because they have made no profit on it until last year. Do I need to include prior year losses on the property, or advise them to seek advice from HMRC?

Very nervous as never done this before, but also excited as it's great experience!

Thanks!

Comments

  • Wonderwoman
    Wonderwoman Registered Posts: 6 New contributor ?
    If you dont know the answers to 1 and 2 you really dont have the experience to complete the return . I would suggest you prepare it and then ask someone more experienced to chck it for you.
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    mrb82 wrote: »
    Happy New Year everyone!

    I have been asked by my uncle-in-law to complete his self assessment and also his wife's self assessment.

    I have a couple of questions to clarify my understanding (I have passed the personal tax exam so am allowed to complete a self assessment).

    1 - As a married couple, they have property income. Who's SA would this go on?
    2 - Do I need to put their employment income on so that their basic rate threshold may be amended by the tax already suffered through PAYE (they're high rate earners)
    3 - One of the properties they have been renting out for many years but have not declared it to HMRC because they have made no profit on it until last year. Do I need to include prior year losses on the property, or advise them to seek advice from HMRC?

    Very nervous as never done this before, but also excited as it's great experience!

    Thanks!

    1. If the property is jointly owned then the rental profit should be split 50:50 (unless the couple have made an election to HMRC stating a different ratio). If the property is only owned by the husband, for example, then the rental profit should only go on his tax return.

    2. Ask them for their P60's and declare the gross salary and PAYE already suffered on their personal tax returns. I'm sure when you done your personal tax exam you would have included employment income + PAYE when calculating a tax payer's personal tax liability. You should probably re-read your revision guide just to refresh your memory.

    3. You should include prior year losses and then in the white space of the tax return state exactly what you have done, i.e. write that you have included prior year losses. This way, at a later date, HMRC cannot argue that they were never informed and cannot argue that you have tried to conceal information. HMRC wouldn't be able to fine you a % of unpaid tax as there was no tax to pay (as the rental property was making a loss).
  • Jo Clark
    Jo Clark Registered Posts: 2,525
    mrb82 wrote: »
    Happy New Year everyone!

    I have been asked by my uncle-in-law to complete his self assessment and also his wife's self assessment.

    I have a couple of questions to clarify my understanding (I have passed the personal tax exam so am allowed to complete a self assessment).

    1 - As a married couple, they have property income. Who's SA would this go on?
    2 - Do I need to put their employment income on so that their basic rate threshold may be amended by the tax already suffered through PAYE (they're high rate earners)
    3 - One of the properties they have been renting out for many years but have not declared it to HMRC because they have made no profit on it until last year. Do I need to include prior year losses on the property, or advise them to seek advice from HMRC?

    Very nervous as never done this before, but also excited as it's great experience!

    Thanks!

    Hello

    Congratulations on passing PTX. I know this is not 100% relevant but thought I would post as a reminder... http://forums.aat.org.uk/showthread.php?35334-Doing-a-bit-of-bookkeeping-You-need-to-be-regulated-by-AAT

    Good luck with the Self Assessments :o


    JC
    ~ An investment in knowledge always pays the best interest ~
    Benjamin Franklin
  • mrb82
    mrb82 Registered Posts: 147 ? ? ?
    Thanks for the reply Reader,

    I will be consulting my notes to make sure I do it right, once I've done it I'm sure the confidence will come.

    Jo, I have double checked with the AAT, I am not in breach of my membership by doing this for experience as I am not asking for payment.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Great advice by reader and Jo, and this is fab experience for you. Helping out family members for free, when they know you are a newbie and just learning the ropes is a great way to get practical experience.

    Every source of taxable income needs to go on the tax return so they can look at the whole picture and work out the right amount of tax. Don't forget bank interest - especially important as they are higher rate taxpayers. Ignore ISAs and other non-taxable sources of income.

    Good luck and do ask on here if you have any more questions :)
  • Dcollins
    Dcollins Registered Posts: 179 ? ? ?
    mrb82 wrote: »
    3 - One of the properties they have been renting out for many years but have not declared it to HMRC because they have made no profit on it until last year. Do I need to include prior year losses on the property, or advise them to seek advice from HMRC?


    Thanks!

    Have you seen their loss calculations? Are they sure no profit was made? I've met people who've stated confidently that they're making a loss on properties, but they have been assuming that the whole mortgage payment is allowable. It's quite common for people to think they can include capital repayments as property costs. Might be worth asking the question, if you haven't already done so.
  • mrb82
    mrb82 Registered Posts: 147 ? ? ?
    I have been passed all the receipts and expenses on the property so I will judge what is allowable or not and advise accordingly.
  • jow774
    jow774 Registered Posts: 465 Dedicated contributor ? ? ?
    The AAT have a new e-learning module on Self Assessment which may prove helpful.
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