Tax Query over rental income

dealhunter

Hi guys,

Question: I have a flat which I own currently. I plan to let it next month.

Now, there are 3 mortgagees on the mortgage (Myself 40% tax payer, and my parents - both retired - dad receives company pension and mum - state pension).

Would it be preferable tax-wise, to have the tenants make payments to my mum, since she earns very little.

Is this possible, even though all 3 of us are named on the mortgage?

Also, would she then have to fill in a tax return, or would we all have to?

Many thanks,

DH

fengirl_2

The question is, who owns the flat? If you all own it it equal shares, you will each declare one third of the income, less expenses which include the interest paid on your own mortgages of the property. You would all have to self assess.

Pennywise

HMRC's property income manual suggests you can allocate profits and losses in a different proportion to the ownership shares

http://www.hmrc.gov.uk/manuals/pimmanual/PIM1030.htm

"Where there is no partnership, the share of any profit or loss arising from jointly owned property will normally be the same as the share owned in the property being let. But joint owners can agree a different division of profits and losses and so occasionally the share of the profits or losses will be different from the share in the property. The share for tax purposes must be the same as the share actually agreed.