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’m guessing posters saying ‘the tax is already paid’ are expecting a large inheritance in the near future and mortified that anyone thinks they should pay tax on it!

Nope…still not convinced!

So to simplify - the inheritance is 100 and IHT if 40 is paid on it. Leaving 60.

it goes to 6 different people who are all BRT so they pay 2 in tax and receive 8.

so overall the taxman has received 52%.

I'm struggling to understand why you think it’s reasonable? I could see your argument if you just don’t believe in inheritance and think it should be taxed at 100% but the mechanism you suggest just isn’t how tax works

Loads of people burble as though pensioners don’t pay tax either.

We have a small comfortable flat in Central London that we visit about once every three months to stay in overnight before an early flight. We should probably let it but can’t be bothered as the admin and rules and licenses and income tax and bollocks around renting it out mean we don’t bother. Not worth it. To make any profit to speak of we would have to charge market rent which is over £2200 pcm. I can’t imagine charging some poor bastard that then having to demonstrate to HMRC we basically don’t make a profit after fees. The paperwork alone is boring enough.

Luckily there’s no shortage of nice rental flats in London. What a great system.

Surely people realise that all income is taxabl

Well, you've had it explained in more than one way by more than one person. If you are still failing to grasp it, I don't think there's anything anyone can do to help.

Additionally if you are a 40% tax payer you only get relief for costs (such as interest) at 20%

The tax is paid from the cash left in estate not by those inheriting. But if let’s say it’s an asset (eg house) it may have to be sold to cover the tax.