Highlighting a historical error to HMRC. Am I in trouble?

[simontrent]

I have a buy to let property and have only been declaring 50% of the rental profits (shared with my wife). I was advised this was ok as she is jointly benefiting from the income. However, I am now concerned that not having her on the title deeds will not entitle me to do this.

I would like to make a self-declaration to HMRC to correct this error; it goes back as far as 08/09.

It is a genuine oversight but I'm worried about the penalty they may apply. I am keen to clean the record and pay any under-payment of tax plus interest, but will there be any further action?

Many thanks for any help.

[Eric Mc]

Get her on the deeds and continue as normal.

[simontrent]

Eric Mc said:

Get her on the deeds and continue as normal.

Eric

Thanks. Will I incur stamp duty if I transfer the property into our joint names?

Do you envisage a penalty if I come clean with HMRC?

Thanks

[Eric Mc]

I'm pretty sure you won't.

Are you married?

[simontrent]

Eric Mc said:

I'm pretty sure you won't.

Are you married?

Yes we're married.

Thanks

[Eric Mc]

That does help and removes any potential immediate Inheritance Tax (IHT) issues.

[squicky]

Eric Mc said:

Get her on the deeds and continue as normal.

Do you know if she has to be on the deeds for the 50/50 split of the rental income to be allowable?
(I'm potentially in the same situation so just looking into the same sort of issues).

[Eric Mc]

It is best as it proves that the other person is legally entitled to their share of the rental income.

[BoRED S2upid]

Is your wife also submitting a self assessment? if so and the deeds is your only concern get her on the deeds and forget about it its a simple mistake to make and your not doing anything wrong ie your still paying the correct tax.

[simontrent]

BoRED S2upid said:

Is your wife also submitting a self assessment? if so and the deeds is your only concern get her on the deeds and forget about it its a simple mistake to make and your not doing anything wrong ie your still paying the correct tax.

The share of the house is her only income and so has not been declared on a self-assessment (under the personal allowance). This I know I have to come clean about. I was to then raise the issue with splitting income at the same time.

Will she get a penalty for non-disclosure (regardless of any tax due) for the past few years?

[Eric Mc]

Technically, she could. However, I have not yet seen HMRC levy a penalty for late notification - even though they are entitled to do so.

I would just ask to start completing the 2012/13 tax return (which is not late) and forget the earlier years.