Question:
I have two flats in London which I didn't know I had to declare to the taxman. I was informed by a friend that I could be subject to penalties from HMRC. I haven't paid any tax over the last seven years. One of the properties is still mortgaged but the other one is already paid. What should I do for the best?
Arthur Weller replies:
You don't state in your question whether you have received rental income from the two flats. If you haven't - then there is no necessity to inform HMRC. If you have - then you should make a calculation for each tax year separately to see whether your gross rental income exceeded the allowable expenses. If it did, and the net rental income is not covered by your income tax personal allowance, then you should take the initiative of approaching HMRC first, before they approach you.
