what amount would you be taxed on?

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

  • what amount would you be taxed on?

    I am new to this and have a complicated situation... I have a property with a buy to let mortgage on, my mam has a mortgage free property. We would like my mam to be able to rent out her property for say £500/month, then if she paid me the same rent per month would she be taxed on her rent? what would be the calculation for offsetting tax against interest etc?

  • #2
    I'm not an expert, so seek more qualified advice but my understanding is:

    You would both be taxed on the £500 a month (but not if any other earnings added to this didn't exceed the personal tax threshold). You can claim tax relief on your buy to let mortgage.

    Comment


    • #3
      1. Your mam's rental profit = 500 x 12 = 6000 pds minus house insurance , repairs & maintenance etc.

      2. Her tax will be calculated as " annual income from work" plus "rental profit" minus "personal free allowance at 8105 pds" = income taxable at 20% or 40% rate.

      3. Your own "rental profit" will be further reduced by annual interest on your mortage.

      Comment

      Latest Activity

      Collapse

      • Do I have to pay capitol gains tax?
        globularity
        I am currently living with my parents and have rented my flat out, this is the only property I own, and I lived there 12 years renting and 1 year as an owner. I am happy to move back in if this helps me to not have to pay capitol gains. Just read somewhere if its your principle home theres no capitol...
        17-08-2017, 22:13 PM
      • Reply to Do I have to pay capitol gains tax?
        Gordon999
        1. The calculation of capital gain starts from the date of purchase of your property up to date of your sale date. If you paid 100K and sold for 160K , then your capital gain is 60K. The capital gain during period of living at the property + 18 months after moving away is exempt from capital gains...
        18-08-2017, 15:04 PM
      • Reply to Do I have to pay capitol gains tax?
        jpkeates
        When did you buy it, between what dates did you live in it, rent it out and when do you plan to sell it?
        17-08-2017, 23:10 PM
      • Buying BTL and declaration of trust?
        bhodgkiss
        Hi there

        I'm buying a btl with my partner (not married)

        i believe we can do the mortgage under tenants in common (as opposed to joint tenants), then sign a declaration of trust to adjust the income split 99:1 (instead of 50:50). She's doesn't work.

        Is it that simple...
        17-08-2017, 06:22 AM
      • Reply to Buying BTL and declaration of trust?
        bhodgkiss
        Many thanks, yes I had read the bit about if one of us dies etc.

        Ok we'll go for the standard joint tenancy, as I believe we can simply draw up a document for her to get 100% income anyway from what's been said here (and other threads)
        17-08-2017, 15:45 PM
      • Reply to Buying BTL and declaration of trust?
        jpkeates
        There are other differences between married couples and non-married couples that kick in.
        You need to look at the totality of the situation, not focus on one part of it.

        If you are married and one of you dies, the surviving spouse inherits the deceased's property automatically....
        17-08-2017, 10:55 AM
      • Reply to Buying BTL and declaration of trust?
        bhodgkiss
        Many thanks

        So aside from ownership implications if we ever split up, surely HMRC will be happiest in assessing rental income if we have a tenants in common ownership 99:1?

        Then rental split follows ownership split?

        Also if we get married it'll need to swap to...
        17-08-2017, 09:04 AM
      • Reply to Buying BTL and declaration of trust?
        jpkeates
        Which is why joint tenants is the better route.
        There's no defined split in ownership.

        How the business then arranges its affairs is then, more or less, up to the business.
        17-08-2017, 08:49 AM
      • Reply to Buying BTL and declaration of trust?
        Raju Gajurel
        As you are not married, HMRC will look for the real beneficial ownership of the property. The factors such as who put down the deposit, who receives and spends rent, etc will become important. So, if your partner owns 99% of the house, then there would not be any issue from HMRC. But, this means she...
        17-08-2017, 08:18 AM
      • Reply to Buying BTL and declaration of trust?
        jpkeates
        That's necessary for married couples.

        As unmarried partners you can purchase as joint tenants (which is probably better for you in some other ways) and decide how you split the income.
        You should probably document the income split and both sign it.
        17-08-2017, 08:14 AM
      Working...
      X