Cash clinic: Much to consider before renting out your property

I own a one-bedroom flat which I do not want to sell in the current climate so I am looking to rent it out to cover the mortgage and bills while I am travelling. I don't really want to deal with the tenants when I am away so I was thinking about asking my elder brother to look after my affairs. Is this possible? Also, I assume I will need to declare the income from the rent when I'm away - can my brother do this for me, too?

AC, Dalkeith

A One way of having your brother looking after your affairs would be to appoint him as an attorney, assuming he is willing to do this. In Scotland there are two main types of power of attorney: a continuing power of attorney and a welfare power of attorney. The former enables a nominated person or persons to look after another person's financial and/or property affairs. The latter covers more personal matters of welfare such as medical treatment. They can be combined into one document.

It is sensible for everyone, particularly property owners, to have Powers of Attorney. They allow another to deal with your affairs in the event that for any reason, such as an accident, you are unable to deal with them yourself. They are also useful when someone goes abroad, as in your case. You should also consider having at least one other attorney in case anything should inhibit your brother from acting. For instance, he may himself be out of the country for a while.

There are many matters to consider before letting a property, such as landlord registration and gas safety checks. It is important to have a formal lease in place and legal advice should be sought.

You could consider consulting a letting agency who would be well placed to find a tenant, collect the rental income and advise you in general. There are many reputable letting agencies that handle such matters daily. Consulting the letting agency would perhaps take the burden from your brother to some extent as he may not be aware of all the implications of letting a property. To answer your specific question, you would need to report your income from the letting to the tax authorities by the relevant income tax deadlines.

• Glen Gilson is a partner and head of private client & financial services at HBJ Gateley Wareing.

If you have a question you need answered, write to Jeff Salway, The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or e-mail: [email protected].

This above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given.

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