Husbands rental house

[MoominMamma15]

posting here for traffic:

Im so worried sick at the moment. My husband owns his own home and kept it when we moved in together. He has rented his home out ever since but has never done self assessment tax return. Putting aside how utterly stupid/wreckless and my anger towards him - i really need some practical advice.

The house we bought was purchased before we married, the mortgage is in both our names BUT im the only one named on the deeds - mortgage was an occupant non owner on his part.

My biggest worry is that hmrc would be able to come after the family home to pay any tax he owes because we are married am i just as responsible for the debt as he is??

He is currently in the process of trying to sell it but i have made it clear he needs to disclose everything otherwise it will only be a matter of time before we get a letter or a knock at the door. His tactic is bury head in sand it will all go away.

I can’t begin to explain the stress and upset and arguments over all of this. I feel he has put us in a vulnerable place and im not willing to lose everything to pay his mistakes off.

He has never wanted me involved in his property so i have only recently been made aware of this situation.

The place is a money pit and an absolute weight round our necks. I can’t wait until its gone.

What makes you think they’ll come knocking? In all likelihood they won’t - I’ve got friends with several rentals who don’t bother to declare and not a sniff from HMRC.

How long has the property been rented out? Does he own that house outright (no mortgage on it)?

He'll be liable for CGT if it's not his main residence - so he should be worried if he's intending not to declare that

Because there’s every chance that they could?

There is a mortgage on it yes

Yes was aware of CGT, he has a buy to let mortgage so i would think its all going to be made aware to hmrc etc

How long has it been rented out?

How long has been renting it out op?

5 years x

Okay, so don’t stress yourself too much unduly, there’s no point arguing about it as what’s done is done, you can look into what should be due without declaring anything just yet to find out the lay of the land before deciding what to do.

assuming he’s not named on the deeds for the new house to avoid stamp duty on second residences, then he technically doesn’t own it, it’s almost like he’s a guarantor to your mortgage, rather then a co owner of the house, so I would think they couldn’t come after that, but I’m not a professsional.

what tax bracket is he in with his normal everyday earnings?

technically if you’ve been renting out a property for 5 years then the tax due will be

Total rental income
minus claimable expenses*. (Or £1000 per year)
x whatever percentage tax bracket he is in.

hmrc can also impose fines up to 100% of whatever that amount is, but used to have an amnesty so you could voluntarily declare back property rental taxes without harsh penalties, not sure if that’s still running.

• claimable expenses are only allowed if you have the paperwork to back them up, receipts/invoices etc, a few years ago you could claim a percentage of your mortgage interest payments, but they phased that out recently.

I’d personally get everything out and try and work out what you think you owe before you make any decisions, they can apparently go back 20 years for landlord taxes so if be inclined to just pay it out of the proceeds of the house, you can risk it but be prepared to pay double what you owe if they come knocking (they may never).

but the debt is your husbands to deal with, as far as I’m aware they can’t chase you for it, but you may want to speak to a professional.

Thank you so much x

yes he def not a co-owner. 20% tax bracket for salary.

Very helpful, really appreciate your help x