My parents and I own BTL- taxation whilst I'm abroad?

[Jezza]

Hello All

I am about to rent out my flat whilst going travelling for at least a year. The flat will be fully managed by an estate agent.

As I co-own the flat with my parents I understand I will not be eligible for the non-resident landlord status as they will still be in the country. So I will remain UK resident for tax purposes.

I am considering employing the services of an accountant. Can anyone recommend a good 'online' accountant who I can talk to by email while I'm away? Has anyone had any experience of these type of accountants? i.e. not face to face.

Also how will the tax situation work with my parents being co-owners? When my tax return is filed does this need to include their other income too?

Thanks for all help.
Jezza

[Tax Accountant]

Hello Jezza,

(1) You need to be sure as to who are the true owner(s) of the flat. It appears that the flat is in the joint names of yourself and your parents. All three of you are then the legal owners of the flat. However, does this legal ownership reflect reality? The tax position is determined on the basis of 'beneficial owners'. Normally these are the same as the legal owners but this is not necessarily always the case.

For example, you could be the only beneficial owner but your parents names were entered on the title deeds to secure their loans to you to pay the deposit on the purchase or because the lenders insisted that their names are on the title deeds as they may have agreed to act as guarantors.

(2) Under self-assessment, each joint-owner of the property will need to complete self-assessment tax return. This will need to incluse 'Land & Property' page to enter the rental income and expenses. Each person will include only their share of income and eligible expenses on their individual tax returns. Each person will, of course, also need to include their other income in their own tax returns. Each person will then be taxed according to their personal income and also their share of the rental profits.

Ramnik