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Posted Wed, 19 Jun 2024 13:24:31 GMT by nelk24
I have a Japan residential apartment renting out with monthly mortgage. The whole rental arrangement was outsourced to a Japan rental management company and I will be received rents minus all charges/fees/expenses/withholding tax/Japanese taxes two times a year (June and December) I would like to know in this case should I declare rental income only when I receive the payment? Or I have to estimate the accrued monthly rent as I would not have any actual payment details for Jan-Mar 2024 And for converting Japanese yen income into pounds, should I use the fx rate when I receive the payment (i.e. end of June and end of December) or have to use monthly fx rate for each months Since there is a couple of fees/charges/expenses, I would like to know which one below will be allowable expenses for tax deductions and how much allowed. A) letting agent fee B) building management fee C) bank Transfer fee D) fixed asset city planing tax E) tax accounting fee F) insurance premium G) building depreciation expense H) mortgage interest expense I) Tax Expenses J) Withholding Tax / Return of Withholding Tax if actual tax expense is not allowable expense
Posted Tue, 25 Jun 2024 08:21:35 GMT by HMRC Admin 17

Hi ,
 
Thank you for your question .

The cash basis is the default basis for most property businesses and under this basis , property business receipts and expenses are accounted for when the money is actually paid or received, not on the date it was earned or expenses incurred.

Ref to :

www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1092  .

Details of allowable property business expenses can be found in the property income manual at ref to :

www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1900

and at the help notes of form SA106  .

Thank you .
Posted Tue, 25 Jun 2024 09:04:21 GMT by BellaBoo
Hi, not a HMRC Admin but wanted to add while it is taxable on receipt, if the rents are collected by a letting agent then you will be taxable on the payment when the agent receives it (not when the agent pays it to you). This is because as your agent they are acting on your behalf and are receiving payment on your behalf. https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1094

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