property joint-ownership and treatment of rental income

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

  • property joint-ownership and treatment of rental income

    Can anyone give me some general advice regarding joint-ownership of rental property and the treatment of rental income.

    My wife and I are considering buying a property for rental purposes. For the purposes of CGT (when we ultimately sell) it would be more cost-effective for us to own the property jointly but as I am a higher-rate tax-payer it would be more cost-effective if my wife acts as the landlord and receives all of the rental income in her name.

    Can anyone confirm whether or not the rental income from the property can be declared as being all my wife's income even though we would be joint-owners.

  • #2
    Why not register the property in you wife's name only? When the time come to sell transfer the property into joint names. Asset transfers between husband and wife are CGT free.

    Comment


    • #3
      Thanks for that response Paul - 2 further questions as a result...

      1 - Would the Inland Revenue get a bit twitchy about that? Might they take the view that the transfer was done purely as a means of avoiding CGT?

      2 - Presumably I would not be able to claim any taper relief on my share of the gain as I would not have owned my share of the property for any length of time (although my wife would have).

      Comment


      • #4
        Originally posted by barry99 View Post
        Thanks for that response Paul - 2 further questions as a result...

        1 - Would the Inland Revenue get a bit twitchy about that? Might they take the view that the transfer was done purely as a means of avoiding CGT?

        2 - Presumably I would not be able to claim any taper relief on my share of the gain as I would not have owned my share of the property for any length of time (although my wife would have).
        No need for HM Revenue & Customs to get twitchy, surely.
        Tax avoidance is perfectly lawful; tax evasion isn't.
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


        • #5
          Consider buying in joint names as ''Tenants in common''. Keep 1% in your name and 99% in your wife's name. The ownership shares are dealt with by way of a Trust Deed which is an internal document unconnected with the Title Deeds and the Mortgage Deed.

          This will assist considerable when you wish to change the ownership back to 50/50 in due course.

          If you share in 1% and 99%, ie unequal, you will need to notify this fact to Tax Office on a special form, otherwise they will deem the income as shared equally.

          Ramnik
          Private advice is available for a fee by sending a private message.

          Comment

          Latest Activity

          Collapse

          • Renting below market rate
            insightforthe
            Hi,

            I having been renting out a property i have, to a mate, for below market rate. Last year for a couple of months, i received less rent than agreed due to unforeseen circumstances.

            So I should have received £17400, but only received £15,400, so I am in deficit of £2k....
            21-07-2017, 23:28 PM
          • Reply to Renting below market rate
            jpkeates
            It depends if you forgave the rent or are still owed it.

            You are meant to complete a tax return on an accountancy (rather than a cash) basis, so you pay tax on the rent you are due, not the rent you receive and use a bad debt provision for any rent owed but not received.

            If,...
            22-07-2017, 09:24 AM
          • Reply to Renting below market rate
            theartfullodger
            Alternatively (what I do..) is I declare all the rent I SHOULD get, then under "other expenses" include bad-debt, unpaid rent, in your case £2k.

            If you later get this, or some, add to rental income amount.

            Sincerely hope you are evicting "friend" and suing...
            22-07-2017, 07:34 AM
          • Reply to Renting below market rate
            MrShed
            No they can't....
            22-07-2017, 05:50 AM
          • VAT paid on Apartment block maintenance
            lampshade
            Hi All.
            Hope someone can shed light on the following. I own a lease in a purpose built block of flats (30 in 3 linked blocks, with 3 separate entrances).
            We all pay our service charges as requested the freeholders appointed service/managing agent.
            The question I...
            20-07-2017, 08:37 AM
          • Reply to VAT paid on Apartment block maintenance
            leaseholder64
            There is someone starting from the same misunderstandings in this thread: http://www.taxationweb.co.uk/forum/v...es-t28896.html The thread covers both the trust and exemption aspects.

            I don't think they end up convinced, but that's their problem.
            21-07-2017, 10:42 AM
          • Reply to VAT paid on Apartment block maintenance
            leaseholder64
            It appears to be exempt, so they can't claim back the VAT even if the money passes through their books.

            Section 42 creates a statutory trust out of the service charges, although there may well have been one implied by the lease. Any service charge you pay on account (e.g. at the beginning...
            21-07-2017, 10:35 AM
          • Reply to VAT paid on Apartment block maintenance
            leaseholder64
            This FTT ruling gives some more information (in a case that proved an exception to the exemption rules): http://landschamber.decisions.tribun...RX-48-2015.pdf The ruling notes the law is not too clear.

            One point to note is that, according to https://www.g...
            21-07-2017, 10:24 AM
          • Reply to VAT paid on Apartment block maintenance
            lampshade
            hi
            thanks again for the replies.
            To be clearer if I may.

            As normal we all pay an annual service charge to cover things like cleaning, gardens, common electric, general maintenance. And I know that all of these services are from one man businesses that are not VAT registered....
            21-07-2017, 10:22 AM
          • Reply to VAT paid on Apartment block maintenance
            leaseholder64
            I would have thought that it was the section 42 trust that is being charged VAT, not the agent. Obviously the agent's fees are subject to their VAT status, and if they provide maintenance services in house, they would be subject to their status.

            Although not quite the same, my bank charges...
            21-07-2017, 09:49 AM
          Working...
          X