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Where Taxpayers and Advisers Meet

BTL

JohnM
Posts:1
Joined:Wed Aug 06, 2008 3:02 pm

Postby JohnM » Mon Mar 17, 2003 8:16 am

My wife has purchased a BTL flat in her name.
The intention is for myself (husband) to act as Landlord's agent.
My wife pays tax at the lower rate, I pay tax at the higher rate.
Will this arrangement be ok as far as the inland revenue is concerned. Is this tax efficient?

Nigel Lord
Posts:518
Joined:Wed Aug 06, 2008 2:18 pm

Postby Nigel Lord » Tue Mar 18, 2003 12:21 am

John

It is unclear from your query exactly what you are trying to achieve. You state that your wife is a lower rate taxpayer, and that you are a higher rate taxpayer. If you act as an agent, are you anticipating receiving commissions? If so you should be aware that you will be taxable at your (higher) marginal rate of income tax, and your wife will receive income tax relief at her (lower) marginal rate. This would obviously increase the joint tax burden.

If the level of your involvement and the rental profits are sufficiently great to warrant such an arrangement, I suggest that you consider establishing a lettings maintenance company to take advantage of the nil and 19% corporation tax rates. There are various anti-avoidance hurdles to overcome, and you should seek advice in this connection.

My firm would be happy to act on your behalf.

Nigel Lord
Lord Associates
Caxton House
Old Station Road
Loughton
Essex IG10 4PE
020 8508 1642 & 07769 931852
lordassociates@ntlworld.com

pffitch@sayersb.co.u
Posts:17
Joined:Wed Aug 06, 2008 2:18 pm

Postby pffitch@sayersb.co.u » Thu Mar 20, 2003 12:15 am

If you act as the agent presumably you will take a commission? If so why, as you will pay tax on this commission at 40%. Surely it would be better to have all the proceeds taxed on your wife at lower rates of tax.?

Paul

pffitch@sayersb.co.uk


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