Aibu most people don't know rental income is taxable?

[sicknessmedi]

Most people don't realize that if you have a second home and rent it out, you have to declare rental income as income and pay tax?

I cannot imagine anyone with half a brain not knowing this. Surely people know that you pay tax on money you receive? And CGT if you sell and make a profit.

Many or most? Do you mean most of your friends, do all these friends have properties they rent out as if not it’s a moot point?

or most people in the world?

So one person, how is that most people?

It would be a very rare landlord who genuinely didn’t know this.

1 idiot person isn’t “most” people.

Of course they know.

Of course he knows!

Of course people know this. It’s just obvious.

As a LL I’m full aware and my accountant sorts out my tax.

Maybe the person you spoke to has a limited company and pays corporation tax. They will most definitely be paying tax. If they’re not dob them in to HRMC.

This.

But are the many people that don't know got a property they need to pay tax on anyway, if they haven't it doesn't matter. Do you really know that many people with rental properties

And insurance. And making sure safety certificates are up to date…….

So pleased this thread will be passed around all the OPs landlord friends to help and educate them .

Has OP just generally asked around generally about this, bit like if I was asked about Non Dom tax and didn't know because I wasn't one anyway.

I would be very surprised if many of the people that need to know this, don't.

I'm pretty sure there is a lot of tax/vat laws that people aren't aware of - but it doesn't matter because they don't need to be.

I had a flat in my early 30s that I rented out as I moved for work. I then rented a place myself.

I genuinely didn't know I had to pay tax on my rental income.

I found out through a casual conversation with a friend after I had sold the flat a few years later.

I looked into it immediately, realised I was within the 7 years in which I needed to declare it to HMRC and did so. They had a campaign at the time to help people in my position (can't remember it's name now). I declared it all, paid the fines, paid the tax.

No idea about other people but yes, it happens.

I get emails from HMRC about tax on rental income a lot. I also pay the tax.

That said, my Sil never declared her property income. I judged her accordingly.

(Edited question already answered)

It’s only taxable if it takes you over the tax paying threshold, which is about £12.5k pa I think.
so if it’s your only income and is less than that, you don’t pay tax on it.

But I think the majority of people know that they have to pay tax on income.

But you still need to declare it officially.

Of course people know this but they might choose to pretend they don't or ignore it.

I'm a landlord, I rent out my old family home and everyone knows you must pay tax on your earnings . People who don't are avoiding tax on purpose.

Everyone I know knows this! I do know someone who has had rental properties for about 20 years now and has never once declared them to HMRC. I rather hope it bites him in the bum one day.

I declare everything religiously and always have and pay the required tax out of my own pocket as none of my properties make money and never have.

Anyone who understands the concept of 'income' and 'tax' knows this.

I thought that too, shall we go on a new subject. Some people think the earth is flat 😂

I’ve seen this a lot in my voluntary role. Usually it’s inherited property or a “spare” property when a couple move in together. They say they didn’t know, but I don’t always believe them. HMRC finds out when people own properties that are not their home address, and vice versa, and via returns from agents. HMRC can usually go back 20 years and charge pretty heavy penalties and interest. But to correct one thing in prior posts, although HMRC says you should notify it and submit tax returns where the income is over £1k (I think rising to £3k), if you have no liability because it’s covered by your personal allowance there is no requirement in law to submit a return unless you’re issued with one and no penalties it can charge.

You should actually read the replies