Simplest way to utilise lower tax rate of spouse against rental income tax?

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    Simplest way to utilise lower tax rate of spouse against rental income tax?

    I do not know if you can help with this?

    A spouse owning property to let wishes to utilise the lower tax band of the other spouse.

    Is there a simple way of doing this without -giving away- the property to the other so without too much paperwork?

    I wonder if it is enough that one simply advises the taxman that 99% (or whatever percentage) of the rental benefit goes to the lower earning spouse? Or must the lower earner actually have to legally own this same proportion of the property (i.e. change the deeds and mortgage)?

    Maybe this is limited to 75% as the mortgage covers 25%.

    Thanks in advance for what could be a silly question

    #2
    A Declaration of Trust placing beneficial ownerhip 99% to the spouse, and submitting Form 17 to HMRC declaring this change will retain the legal ownership and the relief's and allowances. However it sounds as though the spouse ones the properties solely and there would have to be an interspousal transfer on a no loss, no gain basis. You need to see well versed professional legal advice on this. If need assistance PM me with your location although this can be done remotely. Regards Peter

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      #3
      This answers my question perfectly. Specifically that spouse one needs to undertake interspousal transfer of asset to the other before considering the rest of the items. That was the bit that gave me the right perspective.

      Thanks for the PM offer. Fingers crossed it should be okay now and I go to touch lots of wood.

      Comment


        #4
        I am concerned that I di not have the facts and the present owner may have lived in the property so a transfer may loose PPR and Letting relief, so you need to tell me the facts so I can best advise. Regards Peter

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