TC09535 - [2025] UKFTT 00595 (TC)

This appeal concerns income tax arising from the letting of the property in Dunblane (“the property”) between (roughly) February 2017 and March 2020. During that period it was let out on Airbnb. It is HMRC’s view that the appellant is solely liable to income tax on the income derived from the property during this period and have issued discovery assessments (“thediscovery assessments”) for the 2017/2018, 2018/2019, and 2019/2020 tax years (“therelevant tax years”) to the appellant assessing a total amount of tax of £10,748.58.

The appellant does not challenge the validity of the discovery assessments. It is her view, however, that the rental income derived from the property during that period benefited both herself and her former husband, and thus he should be liable for tax on one half of that income.

It is her view, too, that loan repayments relating to solar panels which had been installed at the property should be deductible from the income which has been assessed.

The rental income had not been reported to HMRC on the appellant’s tax returns. HMRC have not issued any penalties for this failure. They appreciate that the appellant was in an extremely difficult personal position and have, effectively, recognised that she simply made a mistake in failing to report the income. This is a humane and sensible decision. We too have considerable sympathy for the appellant’s personal circumstances during the relevant tax years. But, as Mr Gargan correctly points out, our role, as is HMRC’s, is to apply the relevant law to the facts.

For the reasons given later in this decision, it is our view that the appellant is solely liable to income tax on the rental income, and no deductions can be made for the costs associated with the solar panels. We have therefore dismissed her appeal.