UK Residential Let

Tax Question

Where a client is in receipt of income from a UK FHL and also a UK residential let, can I use the cash basis for one of the sources and the traditional accruals basis for the other, or, do I have to use the same basis for both?

Would the situation be any different if the income was received from a FHL in France and a rental property in America as is the case for another of my client’s?

Tax Answer

If you have income from a UK FHL and other UK property income you can use either the cash basis or, traditional accounting basis but must use the same basis for both, this gives consistent treatment across both sources of income.

If the income was from a FHL in the EEA and from a foreign property then again you must use the same basis for both sources, whether you chose the cash basis or traditional basis. The income for the FHL in France will be included on the SA105 UK Property Page and the income from the residential let in America will be included on the SA106 Foreign Page.

You can only use the cash basis if you total income from UK property (including FHL’s in the UK) or income from foreign property (including FHL’s in the EEA) is up to £150,000. Further guidance on what entries to complete within the return can be found in the SA105 Notes.