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Where Taxpayers and Advisers Meet

income from rental

Posts: 4
Joined: Fri Sep 23, 2016 2:23 pm

income from rental

Postby m3trackboy » Fri Sep 07, 2018 12:25 pm

My parents left my two sons a house when the passed away. I rent it out and the income is used to pay school fee's. At the moment I put the income on my self assessment return.
One of my sons is in America and paying tax in America but the youngest who is about to turn 16 is the one who the rental income is paying school fees.

The question is does the 16 year old have a tax allowance and if so can I off set the rental income on his allowance? he wont be working and is still in full time education.

Many thanks

Posts: 7562
Joined: Wed Aug 06, 2008 3:25 pm

Re: income from rental

Postby maths » Fri Sep 07, 2018 4:42 pm

On the basis that both children were minors (i.e. age less than 18 not 16) when they inherited the property they would not be able to hold the legal estate in which case presumably you are shown as holding the legal title which you will hold as bare trustee for the two beneficiaries (i.e. children).

Rental income is usually assessed on the beneficiaries although the person actually receiving the rents may be assessed instead. If therefore the rents are paid into your bank account then you are in receipt and could be taxed thereon as it seems is the case.

At any point in time the children could have each declared their 50% interest in the rents and paid tax accordingly. They would each have and a personal allowance to set against any profit.

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