Section 24

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    Section 24

    Hi All,
    I thought I'd get on the forum for a bit of info from people that know. When Sec 24 kicks in fully or even when it hits 50% I'll be pushed into the higher tax bracket. My wife currently looks after our rental properties and they'd all be in joint name but at the time it was a lot simpler to buy everything in my name. Looking back they should all be in joint names but who knew this was coming.

    The question is if I start to pay my why as I self employed contractor monthly for the management of the properties that will even out our liabilities and keep us in the lower earning bracket. I can't see anything wrong with this and lots of articles online say this is a good way to keep your tax bill down.

    Just looking for advise from others that maybe have done the same or thought about it.

    Many Thanks

    #2
    Do you mean that you want to pay yourself a wage for looking after your own properties?

    Wouldn't you then have to pay income tax on this wage?

    Comment


      #3
      No pay my wife for the work she does. Income tax is paid on this income already but only by me. If I pay her we will both pay it.

      Comment


        #4
        If your wife genuinely looks after the properties and charges market rate, HMRC are probably not going to be too interested.
        Your wife will need to join one of the redress schemes that agents are required to be members of (which isn't that expensive and is an allowable expense for her).

        If the properties are mortgage free, you can transfer the ownership without cost.
        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).

        Comment


          #5
          I'm a chartered tax advisor. Sounds like you and your wife are running the property business as a genuine partnership. You could consider formalising the partnership and therefore allowing profits to be taxable on your wife with no need to transfer legal ownership of the properties.

          You could also consider other structures to carry on your business (such as a Ltd Co or LLP).

          Comment


            #6
            That sounds interesting, so the fact that the properties are in my name wouldn't affect it? Thanks

            Comment


              #7
              The fact the legal title is in your name is not a huge pitfall. The more relevant fact is the way in which the property business has been operating. If it has been operating as a genuine partnership this is more important than the legal title.

              Comment

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