Rental Tax Credit!

C

cord

Registered User
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Hello All
Here's a question for the tax experts! A friend of a friend has a foreign property that he rents out. He acquired the purchase finance by re-mortgaging his home and getting an interest only mortgage/loan. The rental income doesn't cover the interest repayments and property expenses, so for the last three years he has been out of pocket. However! his financial advisers (Corn?) have organised it so that his financial loss becomes a tax credit with regard to his paye income and has received a tax return cheque in the post for the last two tax returns. Sorry for about the inaccuracies in the terminology and before anyone asks for more info, I haven't any as yet. What I do know is that it doesn't sound right? OR is it? Any ideas?
 
It sounds very wrong to me - you can't offset losses/income shortfalls on rental properties against PAYE income as far as I know. Really odd that your friend got a rebate from revenue on this...

Sprite
 
I have to agree with Sprite, sounds like someone is cooking the books!!!or feeding you a fairytale!!!
 
Dito!!
I will see if I can get more info. Plus I know who's door the fault/repayement will lay when the "whatsit" hits the fan!!
Thanks all
 
cord said:
Dito!!
I will see if I can get more info. Plus I know who's door the fault/repayement will lay when the "whatsit" hits the fan!!
Thanks all
Click to expand...

The taxpayer, as always, is solely responsible for their tax affairs.
 
cord said:
his financial advisers (Corn?) have organised it so that his financial loss becomes a tax credit with regard to his paye income and has received a tax return cheque in the post for the last two tax returns.
Click to expand...

For tax issues he would be better off consulting a tax advisor or accountant.

If the best advice from these advisors in relation to a loss making property is to 'fiddle' his tax, he should question the wisdom of their advice. Would he not be better off cutting his losses and selling up, especially since the mortgage is on his PPR?
 
I'm led to believe that at this stage he is unaware of the incorrect advise and incorrect tax returns being made on his behalf. But, as I said, I need to find out more info.
 
If he wants to come clean about his affairs he shoud take copies of his notice of assessments into his local tax office and tell them that he is not 100% happy with agent/accountant and that he would like assessments explained a bit more clearly to him. They maybe able to shed some light on the issue.
 
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