Tax Advice

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Tax Advice

    I have one rental property that I let, making a small rental income. I have recently got married and my wife is renting a property too, however she makes no income on her property and she in fact makes a loss. Can I offset the tax on my property against hers? At present the properties are not jointly owned by us, as they were in our names prior to manage. Should we consider bringing them under a joint name . mortgages? What are the pros and cons?

    We previously lived in the properties before we got married - however, we have now moved into a property which we currently rent, hence us renting out the previous properties we individually lived in.

    Thanks in advance for any replies.

    #2
    No you cannot currently offset.

    Yes you should transfer 50% of each to each - and then you would both have losses and profits.

    If one of you pays (or would pay) tax at a lower rate than the other, then that one should have the lion's share (i.e. more than 50%).

    When it comes to selling the properties, they should (mostly) be transferred back to the person who originally owned them in order to benefit from PPR relief. This to be done before exchange, and ideally before marketing commences.

    Read Helpsheet 283. http://www.hmrc.gov.uk/helpsheets/hs283.pdf

    Comment


      #3
      As you both independantly lived in the rental properties they will attract PPR (PRR) and Letting Relief up to a max of £40,000. A Declaration of Trust can apportion the beneficial ownership but the property that makes a loss would only make 1/2 the loss unless H has a large share. As has been detailed the apportionment will have to be restored prior to any disposal to ensure you benefit from the Relief's. Regards Peter

      Comment


        #4
        Originally posted by TaxationPete View Post
        but the property that makes a loss would only make 1/2 the loss unless H has a large share.

        or, if as I suggested, half of each property is transfered. That way each spouse has half a profitable property or half a loss-making property.

        OP you will want a solicitor to draft the deeds of trust; make sure he gives you the appropriate tax advice too.

        Comment

        Latest Activity

        Collapse

        • Damaged artwork expense
          by jtufty
          Hi all

          Silly minor question really. Last week the tenant accidentally knocked a framed picture off the wall and smashed it. It was only a cheap thing (I guess value was £10). I went out and bought a replacement picture for her. (I know I didnt have to, but shes a good tenant). I bought...
          24-09-2021, 10:35 AM
        • Reply to Damaged artwork expense
          by ram

          As per above, as the place is "part-furnished", which will not incude pictures on walls.

          It's a gift to a stranger. ( They are not family, not close friends - etc. ) and not a claimable expence in any way..
          ...
          25-09-2021, 16:05 PM
        • Reply to Damaged artwork expense
          by nukecad
          I'd see this as an altruistic gift to your tenant and leave it at that.

          My previous LL (although he had his faults) used to buy the 3 of us in his small HMO a £20 case of beer each at Christmas, I doubt he tried to claim it off tax.
          25-09-2021, 15:46 PM
        • Reply to Damaged artwork expense
          by jtufty
          Its let "part-furnished". (she didnt have a bed, so I put a bed in there, and the white goods, and the [now-broken] picture and a few other bits n bobs)...
          25-09-2021, 15:13 PM
        • Reply to Damaged artwork expense
          by Section20z
          You don't need to write anything. Retain the receipt and just include the appropriate amount in youR expenses/capital totals...
          25-09-2021, 13:57 PM
        • Reply to Damaged artwork expense
          by ram

          We assume the place is let as furnished ?

          I don't think pictures are classed as furniture / but then again, a mirror screwed to the wall - if broken by the tenant, then the tenant pays.
          So pictures ? not sure.
          I would charge the tenant the cost of replacement.
          ...
          25-09-2021, 11:43 AM
        • Reply to Damaged artwork expense
          by jtufty
          Thanks guys. I dont know what came over me! A momentary wave of altruism. Most unlike me!

          I have the receipt. What should I log it as? Should I literally just write "capital expense" or should I be more specific such as "replacement of broken picture"?
          25-09-2021, 06:45 AM
        • Reply to Damaged artwork expense
          by jpkeates
          It's a replacement item of furniture and its allowable as such.
          There's an inevitable element of betterment when you replace one thing with another.

          And £40 is neither here nor there as a capital item.
          24-09-2021, 13:16 PM
        • Reply to Damaged artwork expense
          by Section20z
          That sounds definitely like an improvement as you didn't have to splash out £50 you crazy dude.
          £10 down to repairs and £40 capital expense I reckon.
          24-09-2021, 11:59 AM
        • Reply to Let Property Campaign.
          by armour
          No Neelix, I don't approve of tax evasion.

          As it happens, I am the friend who has convinced the lady that it was best all round if she made a clean breast of it and fessed up as soon as possible via the Let Property Campaign and am using such talants as I posess to help her to do so....
          23-09-2021, 07:46 AM
        Working...
        X