UK Landlord Forum / Life

Hi,
I had 2 properties for quite a long time. I never declared the rent as I made no profit both are interest only mortgages.
My dad stayed in 1 and I would use it when visiting family in the area. He would send me a but money for it. I was subsidising this mortgage from another house I was renting out. Accounting a bit for cash repairs  and some roof work  and paying a tv license. I didn't make profit until 2020 when I sold 1 property . Which I paid the capital gains and have be paying appropriate. Tax and declared on my SA.
Now I received a letter from HMRC who think I've been taking a directors loan from a company that dissolved in 2010. And want me to file a 2018-19 self assessment. Or they will make a determination. I don't know how to handle any of this and my mind is racing into insanity.
What should I do ?

Find a decent local accountant and let them help you resolve it with HMRC.
There'll be a larger local firm on a high street near you who'll do this all the time.

You don't only have to report to HMRC if you make a profit, you have to engage with them when you have a new source of income (the clue's in the name of the tax).
By not telling them when you started to receive income, you're already due a penalty, but if you own up (and if there wasn't any tax actually due) they'll probably waive most of the penalty/ies

I'm not sure the flat your dad was "staying" was part of your rental business at all, if there wasn't rent being collected - so you'll want to get the accountant's view on that.

If your dad is still living in the property and there's an interest only BTL mortgage on it, you might be in breach of the lender's terms.