This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Property Ownership

JP2005
Posts:9
Joined:Wed Aug 06, 2008 3:29 pm

Postby JP2005 » Thu Mar 01, 2007 6:37 am

My 04/05 personal tax return is being investigated and i have a meeting next week with an inspector.

I have a portfolio of rental and holidaylet properties with my business partner/partner and all have been declared on our tax returns as jointly owned i.e rental profits / losses have always been split 50-50.

Due to one reason or another at the time of purchase some of the properties (and thus mortgage agreements) arent technically jointly owned and some are in just one name.

No deed of trust has ever been made so am i correct in thinking i (and my partners) will have no come-back if the taxman wants to reallocate all the rental income according to who technically owns the property??

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Thu Mar 01, 2007 10:20 am

Probably. Although it is probably a little unfair that HMRC will use settlement legislation and re-allocate income when it suits their purposes.

maths
Posts:8211
Joined:Wed Aug 06, 2008 3:25 pm

Postby maths » Fri Mar 02, 2007 4:39 am

It all depends upon the facts and evidence to support them.

How were the properties purchased? Can you prove you each contributed cash as to fund your respective shares?

Assuming you can, and given the 50/50 declarations re income on your respective Tax Returns you have a case to argue that HMRC cannot allocate 100% to you.

Lack of trust documentation is obviously very unhelpful. This does not per se preclude you arguing that you have held 50% of the properties as a bare trustee for your partner.

If numbers warrant then specific advice needed.

Attending meetings with HMRC without advisor bad news indeed.

wamstax
Posts:1953
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Postby wamstax » Sun Mar 04, 2007 1:35 pm

There is one line of thinking that you might employ to counteract any challenge byHMRC -namely profits can only arise to the person entitled to the income. Ok it takes a bit of working but what is to stop somebody who has at least a part interest in a property letting somebody else fully operate the leasing and be entitled to ALL the profits.

As Maths says bare trusts is an argument but with the new attack by HMRC on new bare trusts from 6-04-2007 you could be storing up a problem for the future and you should really find a suitable and qualified professional to help
regards
bill@wamstaxltd.com
http://www.wamstaxltd.com
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites


Return to “Tax Investigations and Enquiries”