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HELP!! property income on accrual basis

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  • Practice Licence
  • 13 posts
  • # 118977



If someone rents a property and is on accrual basis, does it work the same as VAT accrual basis where you invoice and VAT is liable.


I am assuming this would mean the landlord would have to declare all income based on a tenancy agreement?


Therefore if the property was let out for 6 out of 12 then only 6 months rent will be declared or is it a case of you declare 12 months of income whether rented out or not?


So confused!!


  • Practice Licence
  • 14 posts
  • # 118987

Hi Louise

Property Income on Accrual basis; lets say property is empty between months of April to September and then let between October through to March (6 months).  However, the March rent payment is not received until April. Under the accrual concept you would therefore need to accrue one months rent so that a total of 6 rental payments are accounted for.  Adjustment would also need to be made for any accrued expenses or prepayments.  Any accurals and prepayments recorded would then of course need to be reversed for start of following tax year.

Hope this helps.


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