Placing Income in mothers name advice?

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    Placing Income in mothers name advice?

    I am a high rate tax payer and have a rental property under my name only.
    My mother only works 2 days a week and my father is no longer around. I want to help supplement her Income. Can I do anything so she receives the rental income or a part of it at 20% by placing her name into the property in some way?
    Thanks

    #2
    Yes you can sell or gift her 20% of the property formally, and put her name on the deeds/land registry.

    Has potential inheritance tax implications, and CGT implications (but these may be neutral or even positive depending on circumstances). And you mom should also have a will especially if their are other potential claimants from her estate.

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      #3
      If I gift her 20% of the property can she get all the rental income at 20%
      What are the tax implications?
      There is a buy to let mortgage also does she have to be on it?

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        #4
        Your lender is unlikely to let you transfer the title or beneficial ownership to your mother without her being on the mortgage (you'd be giving away their security).

        The best way to achieve what you want is probably via a trust (but the lender issue remains).
        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).

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          #5
          as above - fraught with problems.

          If you do not have an agent to manage the property you can employ your mother to do so. https://www.taxinsider.co.uk/760-Tax...y_Members.html

          You could also set up a company and gift your mother shaares but this could mean changing to a commercial btl mortgage.

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            #6
            Originally posted by vik2001 View Post
            I want to help supplement her Income.
            er... why not just give her some money? or cover her utility bills? or buy her groceries?

            or is this request perhaps a thin veil for answers to the real question which is "How can I, as a "high rate tax payer," minimise the tax I am liable for?"

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              #7
              Which would also be fine.
              Everyone should pay the tax they are liable for, but not more than they should - there are opportunities to reduce the tax you pay, and it is only prudent to take them if they are available.
              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


                #8
                agreed, but compared to giving someone the cash outright, this is not a very efficient plan to supplement a relative's income!

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                  #9
                  Originally posted by vik2001 View Post
                  If I gift her 20% of the property can she get all the rental income at 20%
                  What are the tax implications?
                  There is a buy to let mortgage also does she have to be on it?
                  Every person has a personal tax free allowance of £11,000 before starting to pay 20% tax on income.

                  If your mum is getting say £500 per month for part time work= £6000 per year, you could gift her 20% (say) of the property and the share of rental profit below £5000 would not be taxed.

                  You would be liable to pay capital gains tax on the 20% share of theoretical profit but you can claim the tax free capital gains allowance of £11,100 and pay 28% on the excess.

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