Joint house ownership (BTL) - we can split the income and use both tax allowances?

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

    Joint house ownership (BTL) - we can split the income and use both tax allowances?

    Hi all

    My first post here.

    I'm looking at buying a house (buy to let)

    My girlfriend doesn't work (house mum)

    If we buy this house together (joint ownership) can we split the rental income 50:50 tax-wise, so that her full tax-free allowance is put to good use? so if the rental income was £1000 a month, she could take £500 a month and not have to pay tax as £6k for the year would be well within her tax free allowance.

    Are there ways she can take a bigger percentage than this?

    We're not married.

    Regards

    #2
    Originally posted by bhodgkiss View Post
    If we buy this house together (joint ownership) can we split the rental income 50:50 tax-wise, so that her full tax-free allowance is put to good use? so if the rental income was £1000 a month, she could take £500 a month and not have to pay tax as £6k for the year would be well within her tax free allowance.

    Are there ways she can take a bigger percentage than this?
    Go and have a browse in the Tax sub-forum here (which is actually where you should have posted this! ) , this question comes up all the time.

    Comment


      #3
      When you buy a property under joint names, your conveyancing solicitor will ask if you want to register the property titleholder as "joint tenants" or "tenants in common".

      "Joint tenants" means both parties have equal right to ownership of the property and if one jt owner dies, the entire property will belong to the surviving jt owner. As for declaration of rental income in a tax return , each owner would report 50% of the annual rental income less 50% of allowable expenses.

      "Tenants in common" means the title holders will registered as owners according to whatever share has been agreed e.g 10% and 90% and each share can be willed to others. As for declaration of rental income in a tax return , each will declare their share of rental income and expenses proportional to their share of the property.

      Comment


        #4
        I've been searching regarding the same thing and by default it seems that its 50:50, however you can fill in a Form 17 I believe which can change the % on proof of ownership (i.e. 75:25)

        This is my current understanding, any guru's please correct if wrong and i'll edit the post.


        Ref: http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9851.htm

        Comment


          #5
          You need a declaration of trust first - which you should use a solicitor for.
          Form 17 is simply how you communicate this to HMRC.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment

          Latest Activity

          Collapse

          • New to Renting out my property - Some tax questions
            by mucker973
            Hi All,
            I have a property I used to manage myself. The tenant paid me directly and I never declared it with the taxman. Going forward I have decided to use a letting agent to manage all of this. I currently reside abroad and when filling in the forms there is question which essentially is asking...
            24-06-2022, 07:39 AM
          • Reply to New to Renting out my property - Some tax questions
            by DoricPixie
            Your tax situation in Australian depends on whether you’re a permanent resident/citizen or a temporary resident. If you’re a temporary resident you find yourself in tax sweet spot where HMRC doesn’t care about your Australian income and assets and the ATO doesn’t care about your UK income and...
            24-06-2022, 14:29 PM
          • Reply to New to Renting out my property - Some tax questions
            by Gordon999
            If you are living overseas, you must register as a non-resident landlord using NRL1 form to Tax Office if you receive rental income from a UK property. If you don't register , the letting agent is required to deduct 25% tax on any rental money paid to you.

            After being registered...
            24-06-2022, 09:31 AM
          • Reply to New to Renting out my property - Some tax questions
            by jpkeates
            https://www.gov.uk/government/public...g-a-disclosure

            There's a "not quite an amnesty" operating at the moment.
            24-06-2022, 09:02 AM
          • Reply to New to Renting out my property - Some tax questions
            by mucker973
            Thanks JPkeates, I knew you'd know!

            I've been thinking of reporting it for a while. If I declare these past "earnings" do you think I'll just have to pay the tax (if there is any) or do you think there will be any penalties? Penalties are usually applied when you are caught out...
            24-06-2022, 08:47 AM
          • Reply to New to Renting out my property - Some tax questions
            by jpkeates
            I don't know what the situation is with Australian tax on UK rented property, and you'd probably better enquire locally.

            There are two different things to address.
            If you've been receiving income and not declaring it, you need to own up and pay what you owe - which sounds like nothing...
            24-06-2022, 08:32 AM
          • Reply to New to Renting out my property - Some tax questions
            by Covent Garden Girl
            Your questions are more complicated than you imagine.

            1) Yes, firstly as a non resident landlord, the agent or indeed tenants have to deduct tax at source, or you have to send off a form, but also wait for HMRC to send confirmation that they think it is okay for you not to have the tax...
            24-06-2022, 08:17 AM
          • Are utility bills tax-deductible?
            by Bigpat
            I've had a buy-to-let on a standard Assured Shorthold Tenancy for a few years and my tax return has been pretty simple. But since last year I have also had two lodgers, staying with me at my own residential property. Now I have purchased a small additional property, which I have moved into myself and...
            21-06-2022, 14:26 PM
          • Reply to Are utility bills tax-deductible?
            by jpkeates
            Even if you don’t need a licence, managing an HMO can be quite onerous. You’ll need a fire risk assessment, and then to comply with its requirements as a first step.

            That usually means fire retardant doors, different door locks, hard wired fire and smoke and heat alarms for a start....
            24-06-2022, 07:08 AM
          • Reply to Are utility bills tax-deductible?
            by Bigpat
            Thanks. Yes I checked the local authority who said that only "large" HMOs have to be licensed, and that counts as 5 or more tenants.

            I had no idea that separate TV licences would be required. How do HMO landlords usually handle this?
            (a) should I purchase three additional...
            23-06-2022, 21:38 PM
          Working...
          X