Reducing tax burden - unmarried couple

[lloyd1980]

My fiancee and I jointly own a property that we initially lived in for 3 years but now rent out.

She is no longer working and therefore is not using any of her tax allowance, whereas my earnings this year will push me into higher rate tax.

I have read the comments regarding Declaration of Trust and Form 17, however can this still be used even though we are not married to apportion all of the income from rental to my fiancee (all of which will be covered by her tax allowance) thus reducing the tax burden to zero?

Thanks!

[Telometer]

No need to bother with any of that paperwork if you are not married. You just need to agree between yourselves how you wish to split the rent. Do document the agreement "We, Lloyd and Lloydette agree to share the rent of 9 Acadia Avenue 100:0 with effect from today. Signed and Dated."

When/if you get married you will need the paperwork you mention.

[Angele]

Quick confirmation

Hi,

I was looking into this very thing myself. I've just started renting out my house (its in my name with a mortgage), but I am on 40% tax (just). My partner whom I'm engaged to (but not married) is a normal rate tax payer. I live with her in her house.

To enable the tax on the rental property to be taxed in her name is all I have to do is write a document saying that I give the rent 100% into her name with effect from today? Do I not have to send it somewhere or anything?

I'd have thought the tax man would have wanted something more, but I have no clue in this field as its all very new to me.

Thanks

[Telometer]

You need to own the property jointly. So give her 1%, say. And then agree to share the income so that she gets 100% of the income. Do the gift by trust, rather than having to register it at the land registry. And then that is it.

When you get married, change the deed of trust so that she has 99% of the ownership of the property. Do this on the day you get married - sign the transfer as you sign the register. Then file Form 17 with HMRC.


When you come to sell, you will want her to give you back most of her interest in the property as it will benefit you from a CGT point of view.

[Angele]

Thanks Telometer,

Could you or someone else tell me what forms I need to use to transfer ownership and then to transfer a percentage of the rent? Also who needs to see these?

Sorry for being such a neophyte in this regard, but I've never been that hot on taxation law.

A link to a website would help if no one can spare the time to explain.

Thanks

[Telometer]

Go to see a solicitor who has a tax practice attached. You shouldn't be giving away bits of your properties and implementing tax strategies on the basis of gossip found on the internet.