Tax thresholds

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    Tax thresholds

    My first post so please be gentle!

    I am a 40% tax payer and my spouse is a 20% tax payer. If we were to let a second property, I am assuming it would be advantageous for all rental income to factored into his tax return only (it wouldn't push him into the next tax band). Is there any way to achieve this, e.g. would he have to be sole owner of the property? And would a joint mortgage on the property affect this in anyway?

    I've not found any helpful information on households with mixed tax thresholds so if anyone has any knowledge or experience of this, it would be great. Thanks

    #2
    Yes, but even more advantageous if he got a better paying job.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Wow. Perhaps I should have replaced the 'he' with 'she' to garner a more helpful response?

      Any constructive advice re ownership, etc?

      Comment


        #4
        As married couples if you own property in joint names its assumed to be a 50:50 split.
        You use a mechanism called a deed of trust to set the owner ship to the proportion that suits you for tax purposes and send confirmation to HMRC using a special form (Form 17).

        It's a very routine thing for a solicitor to do and most would have a standard fee for the service.
        You might find that doing this for your current property is also an advantage.

        You can change the proportions using the same mechanism if your circumstances change.
        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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        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Thank you Gordon, didn't see your response this afternoon. I will look at this with fresh eyes tomorrow as it's late now.
          I've put some figures in my reply to a post just now but answers below to your questions.

          a] £80k Jan 2021 sale price.
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          08-12-2021, 00:55 AM
        • Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          I appreciate 'ignorance' is no excuse, however there are some mitigating factors, i.e. due to illness etc.

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          06-12-2021, 13:51 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          Andrew, apologies only just seen your post [was it awaiting approval did you say?] answers are:

          Purchased March 1982 as joint tenancy - so equal split of 33 1/3% each party
          Parent 2 died September 2007 - as joint tenancy I inherited their share - so at this point I own 100% of property...
          08-12-2021, 00:41 AM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          JP Keates
          I wasn't aware that refurbishment deductions only applied in terms of letting out the property. On the CGT calculator it asked 'How much have you spent on improvements since you became the property owner'.....

          Here's the timeline:

          March 1982 - 1992 3 Owners,...
          07-12-2021, 18:01 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          JP Keates et al - thank you very much for your assistance. I have this afternoon emailed an accountant to try and get an appointment urgently. I hadn't realised it was all so complicated and it was remiss of me to not be aware of the CGT changes made in 2020 due to not renting out the property. Thanks...
          07-12-2021, 17:28 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by jpkeates
          Refurbishment while you were living there is only allowable against CGT if it was solely and exclusively for the business, so if it was to prepare the property to be let, it would be OK.
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          Get yourself to...
          07-12-2021, 16:22 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          The probate resets a lot of the stuff, but my main response was unapproved
          07-12-2021, 15:36 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          You are really short on detail:

          Date (year & month) bought in joint names ______ (what % was yours then)
          Date it converted to your sole name ______ (presumable date of death of parent 2?)
          Declared vale at probate _________
          Capital expenses between date of probate 2...
          07-12-2021, 15:33 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by reluctantlandlord1976
          We were all joint owners. Bought it with parents. I lived there for 10 years before buying own home. I became sole owner upon their deaths. Rented out since 2007-2019. Empty last two year as trying to sell. Hence I was off the landlord radar. I am now extremely worried by your statement that refurbishment...
          07-12-2021, 14:53 PM
        • Reply to Caught out by changes to Capital Gains Tax
          by AndrewDod
          Let us know the exact timescale and money involved year by year - I am sure some kind person (or even myself) with do a calculation for you so that you can assess the risks involved
          07-12-2021, 14:33 PM
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