So I worked in Canada on a temporary work visa last year for the full year. This will be my first year filing.
I bought an apartment in the UK in November 2012 for my disabled Mother and brother to live in. The main reason I bought it was that she needed somewhere more disabled friendly - my brother lives with her and looks after her. Because I was doing this when I wasn't resident in the UK I had to put down a larger deposit than normal (25%, where as 10% is the norm in the UK) so I took a loan to cover part of this.
Both of them pay me rent as this was a requirement of my Mortgage since I am not living there - the bank required that it had to be leased out on a formal lease. So we have a formal written lease. However the amount they pay me doesn't really cover the Mortgage + insurance + interest on loan + some bills I pay for them. The lease states rent of £500 but they never pay this every month - they usually just give me what they can from Government support they get, around £460 most months - sometimes less as they just pay me this whenever they receive it. For the bills I pay them all and they give me some money towards this whenever they can. I also put in a number of disabled friendly features to the flat, such as a buzzer so that she can answer the door without going to it.
Do I:
(1) Include this as rental income? My thoughts are that the intention was not to make a profit on this (the intention was to provide a better place for my Mother to live), I don't even think I do make a profit (definitely not for 2012) and only my family members live there - this isn't a normal 3rd party (arms-length) transaction.
(2) If I do declare this as rental income can I deduct the interest on the loan I took out to help cover the deposit? If I am deducting this interest, as well as the insurance, finance fees portion, bills I pay for them (etc) I will almost certainly make a loss every year that until the loan is paid off. After the loan has been paid off it will be close to break-even.
I also believe there is a separate form that I have to fill in to declare that I bought a property during the tax year?
Thanks in advance.
I bought an apartment in the UK in November 2012 for my disabled Mother and brother to live in. The main reason I bought it was that she needed somewhere more disabled friendly - my brother lives with her and looks after her. Because I was doing this when I wasn't resident in the UK I had to put down a larger deposit than normal (25%, where as 10% is the norm in the UK) so I took a loan to cover part of this.
Both of them pay me rent as this was a requirement of my Mortgage since I am not living there - the bank required that it had to be leased out on a formal lease. So we have a formal written lease. However the amount they pay me doesn't really cover the Mortgage + insurance + interest on loan + some bills I pay for them. The lease states rent of £500 but they never pay this every month - they usually just give me what they can from Government support they get, around £460 most months - sometimes less as they just pay me this whenever they receive it. For the bills I pay them all and they give me some money towards this whenever they can. I also put in a number of disabled friendly features to the flat, such as a buzzer so that she can answer the door without going to it.
Do I:
(1) Include this as rental income? My thoughts are that the intention was not to make a profit on this (the intention was to provide a better place for my Mother to live), I don't even think I do make a profit (definitely not for 2012) and only my family members live there - this isn't a normal 3rd party (arms-length) transaction.
(2) If I do declare this as rental income can I deduct the interest on the loan I took out to help cover the deposit? If I am deducting this interest, as well as the insurance, finance fees portion, bills I pay for them (etc) I will almost certainly make a loss every year that until the loan is paid off. After the loan has been paid off it will be close to break-even.
I also believe there is a separate form that I have to fill in to declare that I bought a property during the tax year?
Thanks in advance.