SHARING RENTAL INCOME 50/50

Question asked by ELIZABETH TAUSSIG 4 months ago

My husband and I are trialling Clearbooks Free with MTD ITSA in mind. We are both small landlords and we share one of the rents 50/50, which is paid in full by the tenant into my bank.

I can delete the rent payment from my bank feed and then manually create a Rental Income payment for half of it. He can do the same.

I have created an account "Share Rent 50/50" to allocate my payment to him of the 50% and it is going to "Other" on the P&L. I'm not sure if this is correct and I wonder what the best solution is please?

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5 Replies

Hi Elizabeth,

In this case, the easiest method would be to code the whole rental payment to rental income, then code the transfer of 50% to your husband as a refund, also coded to rental income. Your husband can then code that 50% amount straight to rental income.

Tommy

Best answer
4 months ago

Thank you. I am coding the whole rental payment to rental income. When I create the Expense to transfer to him, I don't get the option of "Refund" or Rental Income" as the dropdown defaults to various expenses only. In the list of accounts there is no "Refund" category. Can I create one and link it to Rental Income?

4 months ago

Hi Elizabeth,

For the transfer to your husband, this should appear on your bank statement as a payment out. When explaining this transaction, you must select the Refund tab and you will be able to select Rental Income as the account.

Tommy

4 months ago

OK. I created the account "Refunds" and allocated it to "Rental Income". I edited the expenses already done and it has worked fine. Thanks!

4 months ago

Hi Elizabeth,

That's not quite correct. You will need to void those expenses.

Then, you must head to Dashboard > Bank accounts > All unexplained statements > Click on the All tab > Click Explain > Click on the Deleted tab > Undo the transfer transactions. Then, you need to re-explain them using the refund tab.

Tommy

4 months ago

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