FOR those who live in Spain but rent out property back in the UK, the most important part of the Tax Return is the SA105 – otherwise known as the property income pages.
The structure of the UK Self Assessment Tax Return is based on the main introductory pages – known as the SA100, then any necessary supplementary pages, guided by the boxes ticked in the SA100 – for example the SA103 (for self employment) and the SA105, for UK property income.
However unlike self employment, where you will need to treat each employment separately, all property income is treated as one business – so you don’t need to fill in separate SA105 pages for each property.
Do I need to fill in the UK property pages(SA105)?
You should fill in the SA105 if you receive total rental income of over £1000 from any of the following sources:
- UK land or property
- Letting furnished rooms in your own home
- Furnished holiday lets in the uk or european economic area.
- Premiums from leasing land
- Inducements to take an interest in letting a property (a reverse premium)
Can I claim the property income allowance instead?
The property allowance is a tax exemption of up to £1,000 a year for individuals with income from land or property – even if you own the property jointly.
If your annual gross property income is £1,000 or less, you will not need to notify HMRC, however if it is more than this, then you will need to submit a self assessment tax return including the SA105 pages.
You cannot use this allowance on income from letting a room in your own home under the Rent a Room Scheme. (read more about rent a room relief HERE).
However even if you qualify for the property income allowance you may choose not to claim, for a number of reasons:
- If your allowable expenses are higher than your turnover, you may want to claim tax relief on the loss against any future property income.
- If you are a non-resident landlord and want to claim back tax from the non-resident landlord scheme.
- If you choose not to claim for the above reasons then you will need to complete an SA100 & SA105.
What information do I need to fill in my SA105?
The first thing you will need is your name and Unique Taxpayer Reference (UTR). You should have also filled in this information at the beginning of your tax return.
You will then need to fill in some basic information about your UK properties – such as number of properties rented out, whether they are jointly owned, and if you are claiming Rent a Room Relief for any properties.
Then you will need to fill in details of any furnished holiday lets, including income, expenses and details of any reliefs or losses. You will need to fill in a separate SA105 for any FHL’s in the EEA. (NB – if you receive income from overseas property, or FHL outside of the EEA, then you will need to fill in the “foreign income” pages of the tax return)
Following on from this you will need to complete details of any UK property income (not including FHL’s,Real Estate Investment Trust or Property Authorised Investment Funds dividends/distributions), along with any tax you have already paid on that income (for example if you are an overseas landlord and have had tax automatically deducted by a lettings agent).
After including income information, you can include details of any allowable tax deductible expenses – remember to keep all information about any expenses, as the more expenses you have will reduce your taxable income!
Finally you will be able to calculate your taxable profit or loss. Here you will include any adjustments or reliefs claimed.
Now this can all seem very daunting – and to be honest there are a lot of boxes on the SA105. But that’s where APARI comes in!
If you use APARI, you can upload and allocate transactions easily, and then the software will pull all of this information through to your self assessment tax return. We even have a handy scan and store feature, so that users can attach relevant invoices to their transactions.
Sign up to APARI today, and start Making Tax Doable!