Transfer of rental income to spouse who is lower rate tax payer?

  • Filter
  • Time
  • Show
Clear All
new posts

    Dear jpkeates and Gordon 999 - thanks again for your input. I am hopeful that I can be 99% beneficial owner for ownership and CGT purpose. However even with only 1% my wife is the 'joint owner' and under the special rules under TSEM9846 we will be taxed 50/50 Please see where it clearly states "A couple do not have to opt for a different split. A couple could accept the standard 50/50 split for jointly held property, even if one spouse or civil partner holds 90% of the capital and income and the other spouse or civil partner holds 10%. "
    So I am not trying to bend any rules, just be taxed 50/50 under the special rules for married couples even though I own 99% of the beneficial interest in the property. The form 17 is only submitted where husband/wife wish to be taxed in different shares - and I am happy to be taxed 50/50 as the Form 17 is optional


      There's a difference between "holding capital and income" and beneficial ownership.

      If you are ever investigated or your return challenged, you will almost certainly owe significant amounts of tax and penalties will be imposed.
      Which is the point already raised by your accountant and solicitor, so I don't imagine that there's much point continuing to make the same point.
      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).


        Dear Gents

        Thank you for all your posts. I was hoping to hear from someone who had experienced this first hand. I found more and more on the internet to confirm my beliefs. I can transfer 1% of the beneficial interest to my wife. That can be achieved by transferring a property into joint names with my wife but enter into a Deed of Trust to state that shares are held 99%/1%. We are joint owners irrespective of ownership shares. Submitting a Form 17 is optional, and if no declaration by Form 17 is made, we will be taxed 50/50 irrespective of the underlying ownership. These special rules only apply to married couples. They do not apply to unmarried partners. Further, if Form 17 is submitted, it must agree with the underlying entitlement I could not request to be taxed in unequal shares if this did not agree with the underlying ownership. Apart from many internet articles confirming this from reputable sources, it is also confirmed on the HMRC site, simply google for TSEM9814 and TSEM9846. I really appreciate the input given and I am still checking the forum to see if there are any new posts. I am also looking at other posts to see if I can offer anything helpful


          Dear jpkeates - thanks for your response and I acknowledge you are a senior member over 14,000 posts! To summarise, my solicitor simply wanted to be advised by a tax specialist and my own accountant was taking too long to look into it. However, since then I have now been advised by a full member of STEPS ( Society and Estates Practitioners), who agrees the rulings. This tax rule is also reported in various internet articles and it is also described in the book 'How to Save Property Tax' by Carl Bayley BSc ACA who is described as "Carl Bayley is an expert at translating complex tax laws into plain English and helping investors and businesses pay less tax. Trained as a chartered accountant, Carl is a well known conference speaker and a regular contributor to television and radio on tax matters. He is also currently Chairman of the Tax Faculty of the Institute of Chartered Accountants in England and Wales and is also a member of the Institutes governing Council" This book is fully updated for 2017/2018 and among other things is described as essential reading for "Accountants, solicitors and professional advisors" So in summary I am merely re-organising my financial affairs to pay less tax. If a 40% tax payer pays into an ISA which is tax exempt that is perfectly legitimate. I really appreciate your input. If you google or research 'Form 17' and TSEM9846 and TSEM9814 I am hoping you might form a different view?


            Don't take any notice of the Senior Member label, it's added automatically when you post a lot.
            My number of posts is more due to my being retired than my being smart.

            I remain unconvinced, but don't have any evidence that would disprove your assertion, and, given that you are taking proper advice and are being (presumably) properly advised, it's quite likely I'm wrong.

            Let me adjust my position to "I wouldn't risk it myself".
            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).


              Dear jpkeates, thank for the reply and the humour. The following quote was from Lord Tomlin after a case involving Duke of Westminster back as far as 1936 where the Duke was successful. Every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow tax-payers may be of his ingenuity, he cannot be compelled to pay an increased tax.[3]
              My wife and I will still declare every penny we earn, as we will own it jointly. I have looked intently to find anything that might make me think differently but all I found was more and more evidence that my information was right.


                of general interest from HMRC own case studies



                  Hi - just to conclude matters after referring to tax specialists I have proceeded with the property ownership changes to bring my wife in as a joint owner in unequal shares. I think the relevant facts can be summarised thus: a) there are special rules for married couples who own property jointly and they will be taxed 50/50 on the income even if the share ownership is uneven and b) filing a Form 17 and requesting taxation in the same split as the beneficial ownership is purely an option there is no obligation to do so.


                    Nigel thanks for reporting back on the outcome , it is quite refreshing to get feedback so that other Forum Posters know the exact situation.


                      please could someone help by saying how you actually go about gifting part of a property to a spouse? does it have to be through a solicitor? I couldn't find anything particularly clear on google


                        It's definitely something you want a solicitor (or professional conveyancer) to do.
                        It isn't something you want to make a mistake doing, and you need to update the land registry.

                        It's also useful to discuss it with a family solicitor, as it can mean that you want to change your wills (for example) in parallel.
                        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).


                          Sorry for the delay in responding.
                          To the best of my knowledge of the Transfer of Equity exceeds £40000 then I believe that there is a stamp duty tax to be paid and if your good lady is joint borrower and owner of the primary property the dreaded premium might also apply. JPKeates is correct in his suggestion that you seek urgent advice from your solicitor,.
                          Pleade do Post the outcome as it really helps everyone who visits Landlord Zone.


                            The possibility of stamp duty should only arise if there's a mortgage.
                            Because the "gift" is actually being paid for.

                            That applies to married couples only, though.
                            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).


                            Latest Activity


                            • Furnished Holiday Let - Tax Questions
                              Hi I have a property that I'm letting through a short term holiday letting company. All seems good so far, but can someone let me know how the tax works on this? Its located in Brighton if that makes a difference?

                              Also as this is a "furnished Holiday Let" what can I get away with...
                              13-07-2018, 15:17 PM
                            • Reply to Furnished Holiday Let - Tax Questions
                              BBC Moneybox today suggested new rules in Oct will require LL to spend min 1 night in holiday Let to gain any tax advantage for duration of Let.
                              15-07-2018, 22:46 PM
                            • Reply to Furnished Holiday Let - Tax Questions
                              1. You speak to a tax inspector, not the person that answers the phone (phone your own tax office, or the one local to you).
                              2. Get the tax inspector to put the advice in writing to you.

                              I have done this several times.
                              Once I was given unsolicited information that allowed me...
                              15-07-2018, 14:45 PM
                            • Reply to Furnished Holiday Let - Tax Questions
                              Personally, I wouldn't take advice from HMRC, a) the people manning the phone aren't qualifies and b) it's like taking legal advice from the police about a criminal matter.

                              You need to sit down and talk it through with an accountant in some detail (I'd imagine Brighton has quite a lot of...
                              14-07-2018, 08:35 AM
                            • Reply to Furnished Holiday Let - Tax Questions
                              Best to phone in and ask a tax inspector.

                              But, I believe the position includes:
                              • To get any tax relief, the property has to be available to let for at least 210 days each tax year and actually let at least 105 days each tax year.
                                if property is bought part-way through a tax year,
                              13-07-2018, 21:29 PM
                            • Buying new commercial, set up Ltd co?
                              I own a number of properties, earn over the 40% threshold, trade as a private individual and do a self assessment return each year for Land & Property.

                              Now, I'm looking at a new property, but commercial this time, I'm 50/50 about setting up a Ltd company to purchase the new property...
                              11-07-2018, 13:17 PM
                            • Reply to Buying new commercial, set up Ltd co?
                              A limited company doesn’t have to have been operating before you buy your first property within it, indeed many lenders will use your personal involvement in Property as a measure of credibility.
                              If you decide to include your children , are they over 17 years of age and what percentage will...
                              11-07-2018, 20:04 PM
                            • Capital gains sale

                              Wonder if you can help.

                              I own a currently rented out property and looking to sell.

                              Its a little confusing hence my question.

                              So to run down a timeline

                              March 14 - bought the flat on a shared ownership basis - 50% of full value of...
                              07-07-2018, 20:10 PM
                            • Reply to Capital gains sale
                              Your total buying cost = GBP 163K . So if you sell at 280K , then your total gain = 280K-163K = GBP 117K .

                              Your total period of ownership from Mar 14 to Sept 2018 = 4 years + 6 Months = 4.5 years..

                              Your period of former main residence = March 14 -April 16 + 18 Months from...
                              09-07-2018, 19:48 PM
                            • Reply to Capital gains sale
                              Thanks for your reply
                              Estimated sale price is 280,000.
                              09-07-2018, 18:14 PM