16:03 PM, 1st June 2021, About 6 months ago 12
Hi, We recently acquired a flat (no mortgage) – the flats we wanted do not come on the market very often, so we have bought it around 5 years before we are ready to exit London and move into it. We have no intention of buying more properties. So I am an Accidental landlord.
We have a local letting agent and the flat is now being let at market rates.
I am not an accountant but have some familiarity with accounting, tax returns and capital gains. I run my own little self-trading micro-business (more a service to others than a source of income).
So my mind turns to P&L accounting and end of year tax returns for the rental income? Any views on the following:-
1) I can’t see anything complicated in doing the rental property accounting and tax return myself – The flat has a good managing agent (+£) and with a letting agent, the cash accounting is simple. So I can skip having a professional accountant?
2) The letting agent wants to charge me around £150 for an annual tax statement. Beyond “convenience”, I can’t see this would provide anything that is not on the monthly statements – hence MS Excel can easily create the annual P&L for tax purposes. Worth having the letting agent tax statement?
3) Should I run the rental business (for the 1 property) as wholly separate from my existing micro-business, or roll them together? They do not naturally fit together.
Our objective is to have the flat pay its costs, provide a small income, and we pay all necessary taxes for the few years that it will be rented. We will then sell our house in London and move into the flat as our retirement home until we die or go into a care home (so managing capital gain/loss and IHT on this flat is not a priority for us)
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