2 properties - jointly owned with partner - how do you do quarterly updates and tax returns without double accounting? HMRC don’t know!

Question asked by Bev Cooper 2 months ago

I have just spent an hour on the phone waiting to speak to HMRC only for them to say they didn’t currently have an answer for this question and to speak tl the software provider! They are going to have to do further investigation - it is hard to be;ieve the question wouldn’t have been asked yet!

Anyway, I own 2 rental properties 50:50 with my partner. Up until now I have used Excel to prepare our tax returns - splitting the income, expenses and profit 50:50.

I understand that I will need to set up a separate Clearbooks account for my partner to submit his tax returns. His Clearbooks account will however link through to the same bank account, so this raises 2 questions,

1) for the quarterly update submissions this will mean HMRC receive the full forecast income and outgoings for both of us - which will mean when we submit our tax return it will be half of what the quarterly updates forecast.

2) When it comes to submitting our tax returns is there an option to submit 50% of the values - as I would do if I am using excel to prepare my figures ready to submit on the HMRC self assessment website.

HMRC technicians weren’t able to answer this - other than to say I would need I separate account for my partner (which j had already assumed!!)

I know we don’t need to be doing this until the next financial year, but I was doing it voluntarily to get ahead of the curve!

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8 Replies

Hi Bev,

1) MTD requires each individual to submit only their personal share of the property income and expenses. In this case, you will require a separate Clear Books Landlord account each.

The 50/50 Split: In your Clear Books account, you will only record 50% of the total rental income and 50% of the total expenses. Your partner will do the same in their separate Clear Books account. You could just use your existing spreadsheet and type in totals per quarter into Clear Books.

I would recommend reading our Support Hub which will include a comprehensive library of guides to help you get started.

When you submit your Quarterly Update to HMRC, Clear Books will only send HMRC the totals based on the records in your individual account (i.e., your 50% share). Your partner's submission will send their 50% share.

2) Submitting Your Tax Returns (Final Declaration)

Yes, Clear Books provides the exact option you need to report only your share. Since you are recording only your 50% share of transactions in your Clear Books account.

Quarterly Updates: These will reflect your 50% income and 50% expenses.

Final Declaration: The final MTD tax return will submit your 50% share to HMRC, alongside your other income (like PAYE, dividends, etc.).

Tommy

Best answer
2 months ago

Thank you Tommy for coming back to me so quickly and providing such a clear answer.

On the quarterly updates how can I update them so it only shows 50% on the totals on my account (and when I set it up - on my partners). Sorry if this is an obvious question.

2 months ago

Hi Bev,

No problem, and when inputting the income and expenses, you must only input your 50% so that it reflects correctly in each of your accounts.

Tommy

2 months ago

Apologies, I may not have explained mt]y query properly.

When you link Clearbooks to the bank account it downloads the transactions into Clearbooks….there is one account that we use for the apartments,-therefore the same transactions will download into both of our ClearBook accounts.

Is there a way I can manually edit what it reports to HMRC on the quarterly reports?

2 months ago

Aah, do I have to manually input my expenses and income, rather than linking to our bank account?

2 months ago

Hi Bev,

Unfortunately not, if you link the bank feeds, the transactions will be sent as they are from the bank. When you explain the transactions, you would explain 50% as income/ expenses and the other 50% as drawings. Alternatively, you can use your spreadsheet type in totals per quarter and import this into Clear Books.

And no, you can do either method, the manual entry would allow you to input only your 50% share.

Tommy

2 months ago

Hi Tommy

I have the same question and would like to expand a bit on the drawings solution.

Can I get the system to recognise the rent transaction every month from the bank feed and automatically default to 50% and 50% drawings?

Thanks for your help

David

5 weeks ago

Hi David,

Unfortunately not, there is not a way to automatically split the transaction. However, please see: there is a HMRC notice about joint property not requiring full digital records, just one post for income each quarter and expenses on the year end MTD tax return. You can choose to record each transaction if you want, but it is not required for jointly owned property.

Tommy

5 weeks ago

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