is this legal or not?

by **longashton15@hotmail.com** on Thu Feb 03, 2011 11:22 pm

Hi,

My parents have 3 properties in their names and the rental income goes into my bank account as I manage the properties for them.I have always declared the rental income on my parents tax returns, but some one told me today that the rental income should in fact be declared on my tax return instead and that I have committed a very serious offence.

I am going to open accounts in my parents names and send the money into their accounts to resolve this.

Forgive me if I seem stupid, but I am genuinely confused by this.What is the name of the Act for which I have committed this offence?

by **mullet** on Fri Feb 04, 2011 11:08 am

I thought this was going to be along the lines of "I receive the money so I declare it ... what's wrong with that?" To make a change, it is the exact opposite.

What you are doing is fine, as it is not your income to declare. The basic principle to follow is this - the income must be declared by the person or people entitled to receive it. What they then do with it is their business. All your arrangement does is to bypass the deposit into their account and the transfer to your account. There is nothing wrong in this. The only slight issue would be this: if HMRC enquire into their tax returns then they might be expected to produce your bank statements as part of the rental business records. That's all.

The advice that you were given is misleading scaremongering.

by **longashton15@hotmail.com** on Fri Feb 04, 2011 1:36 pm

Hi Mullet,

Thanks for your reply because i have been extremely upset by what I was told and so was my parents.I really can't thank you enough.

by **King_Maker** on Sun Mar 20, 2011 6:56 pm

It is their income, not yours - so you have done the correct thing.

Whoever told you otherwise is wrong. Having said that, HMRC can assess the agent or the receiver of the rental income - but that does not apply here.

You might wish to consider changes to your banking arrangements.