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Where Taxpayers and Advisers Meet

Rental income transferred to wife

justoneguy
Posts:1
Joined:Fri Aug 28, 2015 12:40 pm
Rental income transferred to wife

Postby justoneguy » Fri Aug 28, 2015 12:46 pm

Hi all

I would be grateful if you could help on following.

I own a property (100%) and want to let it out. As I am taxpayer (HR) and my wife is not (no income), I want my wife to receive the rental income to save from tax. I will eventually move title on her name, but as it will be rented out pretty soon we might not be able to complete the transfer hence will have to pay tax. I came across with beneficial ownership concept (99%/1%) in the internet and in most cases people discussed these when property was in joint ownership. However in my case I own property 100 %. There is no mortgage involved in property.

What is the best way to tackle this issue? Do we need to fill some sort of form and submit to HMRC and title transfer is the only way to solve this?

Thanks

James

section 44
Posts:4468
Joined:Thu Oct 30, 2008 12:47 pm

Re: Rental income transferred to wife

Postby section 44 » Fri Aug 28, 2015 1:20 pm

What is the best way to tackle this issue?
If you want to give your wife a 99% beneficial interest then do then (i.e. declare a trust) and file form 17 with HMRC.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Rental income transferred to wife

Postby Peter D » Fri Aug 28, 2015 3:22 pm

To use a Declaration of Trust and a Form 17 you need to own the property jointly. Regards Peter

section 44
Posts:4468
Joined:Thu Oct 30, 2008 12:47 pm

Re: Rental income transferred to wife

Postby section 44 » Fri Aug 28, 2015 3:42 pm

To use a Declaration of Trust and a Form 17 you need to own the property jointly.
No.

A sole owner can declare the he holds property on trust for another with/without himself. Is this disputed?

The form 17 procedure arguably might not be necessary as the property would not legally be jointly owned. However, this point is unclear because, in equity, there would be co-ownership by husband and wife. Accordingly, in view of this:
What is the best way to tackle this issue?
err on the side of caution and file form 17 - at worst it's superfluous and you would have wasted a little time effort.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: Rental income transferred to wife

Postby Peter D » Fri Aug 28, 2015 4:35 pm

Various forum's address this issue

http://www.accountingweb.co.uk/anyanswe ... -what-else

For instance. Regards Peter

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: Rental income transferred to wife

Postby King_Maker » Fri Aug 28, 2015 6:40 pm

You may need to review the CGT position, if you have ever lived in the house as your home.

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Rental income transferred to wife

Postby LozaACCS » Sat Aug 29, 2015 4:00 pm

King maker

Can you expand on the CGT issues

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: Rental income transferred to wife

Postby King_Maker » Sat Aug 29, 2015 4:17 pm

King maker

Can you expand on the CGT issues
The OP has not stated whether the property in question has always been an investment property or merely become one after he has moved out (having been his home/main residence).

If the latter, PPR (Principal Private Residence) and LR (Lettings Relief) could be at risk due the property not being the OP's residence at the time of transfer (section 222(7) TCGA 1992).

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Rental income transferred to wife

Postby LozaACCS » Sun Aug 30, 2015 10:15 am

Kingmaker

Yes I agree, the position would be different if the property in question was currently occupied by them as a main residence, the post does suggest otherwise.

PetrosL
Posts:1
Joined:Thu Oct 08, 2015 4:32 pm

Re: Rental income transferred to wife

Postby PetrosL » Thu Oct 08, 2015 4:42 pm

What is the best way to tackle this issue?
If you want to give your wife a 99% beneficial interest then do then (i.e. declare a trust) and file form 17 with HMRC.
Hi section44 , can you please help with this problem.

I own a property that I rent before i got married. Now I am getting hit with 40% tax because of my income from my job.
Property is mortgaged, and my name is on the mortgage contract. So I own the property 100%. Because my wife is a housewife (no income) the lender does not wish to include her in the mortgage.

Is it possible to transfer the rental income to my wife, and if yes how.
Every single thread on the net is dealing with shared ownership. I can't find a single one that deals with "husband owns a property - rent goes to wife for tax purposes."

Thank you

Petros


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