rental tax

[john0164]

hi everyone i have question it is now time to pay rental tax i have done the calculations i dont owe any money for last year do you think it is wise to pay something than nothing at all just to stop any investigation and to keep the peace any help would be great

[BM06]

John,If you have done the calculations and you do not owe anything, why would you want to pay anything, just can not understand that logic[?] what is there to investigate[?]would you pay a tax in the UK you did not owe[?]

[john0164]

yeah i no but i have to ask these questions just to get a second opinion

[Ovacikpeedoff]

I assume that you are referring to a property in Turkey that has generated rental income.There are 2 considerations that need to be taken into account.

The first consideration is the tax liability that you might have to the Turkish government. I think that the Land of Lights ran an article that that showed the basis for calculating the Turkish liability but I cannot remember detail.

The second consideration is your liability to the UK tax authorities. Your profile gives me the impression that you live in the UK. If that is the case then you may have a tax liability in the UK.

Legally you are required,whether you have a tax liability or not, to inform the tax authorities in the UK and Turkey that you have rental income. The net rent would be subject to tax.

You would not be required to pay 2 lots of tax.If you had a tax liability in Turkey then you would be able to offset this off against the UK liability and pay HMR the net amount..

[Steve A]

My understanding from a Turkish accountant is that if your rental income minus your individual tax allowance(2600ytl) minus your expenses allowance (25%) is a minus figure you do not have to submit any tax return.However if it shows a gain you pay 15% on that gain and 30ytl for Govt stamp and need to produce appropriate proof.

[john0164]

after the deductions it came out at -3.75 tl

[Chinook]

Ovacikpeedof. As Steve A says if your net rental income is below the allowance ( currently 2600 TL currently I believe) then you do not have to tell the Turkish taxman if you are a non resident.


 

quote:

6. EXCEPTION IN RENTAL INCOME
If persons, who gain rental income from house, obtain income less
than the amount of exception that is established annually, they are not
required to file a tax declaration to tax offices.

In calculating if monies are due you cannot set off all of your years expenses against rental income if you only rent part of the year, they must be pro rata;  and other than immediate close family you must charge a notional rent for people who stay free or at a reduced rate.

john0164 This is the booklet that the extract came from and which explains the basis of calculation and which from the question you raised sounds as though you have not got.

http://www.turkisheconomy.org.uk/nonresident_taxpayers2010.pdf