Signing half a BTL to my partner (who doesnt work) for tax benefitd

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  • jpkeates
    replied
    If you're the landlord, you can't charge for your own time.
    If you own the property, but aren't the landlord it all gets a bit murky.

    Leave a comment:


  • Laurasplog
    replied
    Slightly off on a tangent here, but I saw someone mention that you can employ your partner to "manage" the property (so long as it's fair market rates).

    My husband and I own joint BTLs, and I have given up work to parent, but also manage our (small but often demanding) property portfolio. Can I claim a small wage or charge by the hour to our business for the time I put into it? Or is this irrelevant if I own the property?

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  • jpkeates
    replied
    There's a big difference between tax avoidance and tax evasion.
    One's illegal and one is legal for a start.

    If you run a business with shareholders who want maximum profits and dividends, you have a duty to maximise profits and dividends, which means paying the least tax possible.
    Amazon and Google pretty much told parliament as much when they were asked to explain their tax evasion policies.

    There's no reason a self employed person should pay a penny more tax than they should.
    As a citizen, you should make sure you don't pay any less than you should either.

    Anyone who thinks that it's somehow wrong to minimise the tax they pay can simply help out by ignoring their personal tax free income tax allowance, and not claiming business expenses as allowance against tax.
    That way they can avoid any guilt they feel using legitimate measures to make sure the tax they pay is correct.

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  • calm-on-the-surface
    replied
    Originally posted by bhodgkiss View Post
    Who said anything about tax evasion? I'm asking about minimising my tax legally. Funny.

    Thanks all for the info

    She does own half our main house, and the mortgage remaining on the BTL is over £80k, so she'd be liable for 3% stamp duty which would be around£2.5k..... I hadn't thought of that.

    Sounds like it's not worth doing. We may as well buy another BTL together and benefit that way. She's already considering becoming my letting agent as she's already doing most of the leg work, which will have its benefits.

    Many thanks
    Setting out to minimise tax liability by doing something that serves no other purpose except to pay less tax is avoidance and/or evasion. It is not fair nor right, despite what the neoliberals may say.

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  • bhodgkiss
    replied
    Well, I appreciate your input. So many thanks

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  • ram
    replied
    Sorry we are changing the subject, but we try to help.
    Some of us "care", and future capital is all our aims, saving money, as well as helping landlord and tenants.

    Think on this for the future.
    Partner or wife is given for free, half your main house and BTL.
    You separate ( it happens all the time even in the most loving relationships.)
    You to have to give, in cash, half the price of the main house to the wife, but wife insists she must continue to have what you gave her, and has been accustomed to in the relationship.

    This means therefore must live in your house, and you can't. She may well secure your house to live in, via the courts, as she has children to house, and no job, and it has happened !
    You have to continue to pay the mortgage, cannot sell the house to give her half the money, cannot live there, so you have to find the money.

    She will also have claim to half the BTL, and you will have to sell it to give her half, or find more cash.
    The bottom line is you end up with nothing.
    No BTL and no home, sleeping under a bridge and paying mortgage and child support.

    The above consideration is more important than your original question.

    Leave a comment:


  • loanarranger
    replied
    I go along with Ram , seems the old sayings may be apt in this instance Love is blind and there's no fool like an old fool. Keep your hard earned assets to yourself for protection for the future.

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  • ram
    replied
    Originally posted by bhodgkiss View Post
    Ahh, we're happy, you see
    Not married, not earning, wants half your property on top of the half she already has.

    No, don't go there.

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  • bhodgkiss
    replied
    Ahh we're happy you see

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  • ram
    replied
    Why do you want to give away half your property, for free, for no payment ?

    Lets assume you paid £ 100,000 for the BTL. So why give someone £ 50,000 -- for nothing ?

    If you ever split up, and 30/40% of couples do, she can make to sell the BTL and give her half the sale price.
    Not a situation I would entertain.

    Leave a comment:


  • bhodgkiss
    replied
    many thanks

    yes we've been discussing this as she does a lot of it anyway, so might as well do the lot and I pay her (just a in a separate thread a few posts down)

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  • gowf
    replied
    an option is for you to hire her as a manager for the property or pay her some compensation for time spent monitoring or maintaing the proeprty. Of course this is open to abuse and HMRC do keep an eye on these. You would have to do it fairly - ie according to market value of what she actually puts in.

    In that way, her "costs" are tax deductable to you as well as utilises her tax position.

    Leave a comment:


  • bhodgkiss
    replied
    Originally posted by calm-on-the-surface View Post
    Marry your partner and make an honest woman of her, then pay your taxes honestly. Tax evasion is not the way to go.
    Who said anything about tax evasion? I'm asking about minimising my tax legally. Funny.

    Thanks all for the info

    She does own half our main house, and the mortgage remaining on the BTL is over £80k, so she'd be liable for 3% stamp duty which would be around£2.5k..... I hadn't thought of that.

    Sounds like it's not worth doing. We may as well buy another BTL together and benefit that way. She's already considering becoming my letting agent as she's already doing most of the leg work, which will have its benefits.

    Many thanks

    Leave a comment:


  • calm-on-the-surface
    replied
    Marry your partner and make an honest woman of her, then pay your taxes honestly. Tax evasion is not the way to go.

    Leave a comment:


  • Claymore
    replied
    You really need to work out what all the pro's and cons are.

    If the current mortgage is more than £80,000 and your partner already owns or is named on the deeds of another property, the gifting of half of the mortgage value will attract stamp duty at 3% above the normal rates.

    Leave a comment:

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