Splitting Tax relief

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    Splitting Tax relief

    Hi
    I have a property that I own jointly with my wife, and am in the process of filing my first tax return. I am a 40% taxpayer and my wife is 10%, and we are planning to split the income 50-50.
    My question is around the tax relief (mortgage interest, letting agent fees, plus a small amount of maintenance) - am I right in thinking we also halve each of these figures, and claim that amount in tax relief each? ie. I will half the mortgage interest, fees etc on my tax return and my wife will do the same? As far as I can tell that's the correct way but I've not found anything to confirm that - any advice from anyone more experienced much appreciated!
    Cheers
    John

    #2
    We were informed by our accountant that any rent and expenses should be allocated to each party in the same share as their beneficial ownership which, as my wife and I are joint tenants, is a simple 50/50 split. Perhaps if you owned the place as tenants in common and own different percentages then the split could mirror that?

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      #3
      Thanks. Yes our ownership is 50 50, and we're splitting the rent income as such.
      The question is related to the tax relief aspect, where we can declare the mortgage interest and agents fees as expenses. I'm trying to work out if we also split those amounts 50 50 and each of us claims tax relief accordingly, or if we can each claim tax relief against the whole lot (which I doubt)

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        #4
        I've been advised the same as Goobs27. Yes, split any interest, maintenance costs, agent fees and any other expenses 50/50. If the ownership was any other percentage you would split in accordance with that %. On the tax return there is a question as to whether you own the property jointly.

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          #5
          Ok great, thanks both

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            #6
            You should probably consider whether a simple declaration of trust (and form 17) would be worthwhile, as you could split the income and expenses so that your wife took the income and expenditure (say at a 99:1 split) which might save a bit of tax.

            Costs a bit set it up - so it's worth while considering if it saves enough to justify it.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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              #7
              Originally posted by jpkeates View Post
              You should probably consider whether a simple declaration of trust (and form 17) would be worthwhile
              I'd never heard of it until today when I started looking into this, I will look into it, thanks

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