PTC_ Rental Income

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
Hi all,
Wondering if anyone who sat PTC today (or anyone) can solve this puzzler for me.

The question said for his rental income that one tenants paid in advance but one tenent paid to fail and left. He couldn't rent it again to may which was outside the tax year.

Should the non payment mean that the rental income should be time appaortioned for the months when no rent was paid?

Some people did this but others including myself didn't as rental income is taxed on an accurals basis.

Any feedback from you guys would be appreciated.

Thanks
Sair

PS Good luck for exam results and have a great summer.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC_ Rental Income

    I said that as he only 'thought' he wouldn't get the money rather that it was definitely irrecoverable the whole rental income for the 3 months should go in. Although I then forgot that April was the next tax year and as there was no rent for that month claimed 11 months rent for that property. :oops:

    If it was irrecoverable he would only claim a rental income of what months he received rent for. It doesn't matter when he receives it, whether it was paid in advance or six months later.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC_ Rental Income

    Sair, you got it spot on. Rent is on an accrual basis, so the computation is based on rents receivable for the year, whether the guy did a bunk or not!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC_ Rental Income

    Thanks you guys.

    It saves the wondering forever until the answers come out.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC_ Rental Income

    Yeah Sairmawby I think you got it spot on you accrue for the whole 12 months rent and if you wanted to be really clever you could have provided for a bad debt if the rent wasn't going to be received.

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:PTC_ Rental Income

    Thanks Dean

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