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

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    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

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