Rental Property Income Split between husband and Wife

[dowles]

Hi

If I own a rental property jointly with my wife can I allocate all or most of the income to be in her name if she has a more favorable tax position? Can I then revert this should the tax position change?

Thanks

[section 44]

If I own a rental property jointly with my wife can I allocate all or most of the income to be in her name if she has a more favorable tax position?

You would each be taxed on half of the rental income

[dowles]

OK but is there no way of assigning un-equal shares in the property or even gifting the property to my wife?

[bd6759]

Ownership of income follows ownership of the underlying asset.
If you can show that you own the asset in unequal shares, then you can inform HMRC (on form 17) of this.
http://www.hmrc.gov.uk/manuals/tsemmanual/tsem9851.htm

[litecoin]

Hi, I'm not sure if this is possible but I would suggest that you think about gifting part of the property to your wife. Or would it be possible for your wife to purchase your share of the house?

I also own a house in Croatia for rental but the property is owned by my wife. The paperwork / deeds to the house also would need to be changed so they are in your wifes name only. There will be legal costs for this and a trip to Croatia is required.

You can then declare any rental income against her name. Assuming she doesn't work the first £11,000 of profits will be tax free.

[bd6759]

I also own a house in Croatia for rental but the property is owned by my wife.

Eh?

[Lee Young]

If you do a declaration of trust and register form 17 with HMRC you and your wife can split the ownership and the income however you want.

[vector]

Re declaration of trust - only if it is mortgage free ?

[Lee Young]

No. The presence of a mortgage does not affect the declaration

[OAM]

We own our property as joint tenants. We submitted form 17 for a unequal split in beneficial interest, 60:40 with a declaration of trust. The form does not allow separation of the legal and beneficial interest from legal interest and we wrote to HMRC about it which they confirm. They quoted me TSEM 9850 (cited below) seeming to ignore the evidence supplied (TSEM 9851), our declaration of trust and "reality", my contribution to for medical reasons.

Any comments?