Tax On A Rented Property

liddesdale

Hi all

Was wondering if anyone can help a few years ago I invested money to buy 50% of a flat. There has been a small income every month which is pure profit(as the property is owned outright), which I have always declared in tax returns (I am in the high tax band). However things have now changed and my mother who owns the other half of the property now need to take all the monthly money to help top up her pension.
What will now happen with my next tax return, do I just declare no addition income other that my wages.
Ment to say the property is registered in joint names and I deal with the letting side of things.

Thanks in advance to anyone that can help me. (sorry if its a daft question)

Liddesdale

silvercar

You still own 50% of the property, so still receive 50% of the income and still pay tax on the rental income.

The only thing that has changed is that you are now gifting (or loaning?) some money to your mother each month. The taxman won't be interested in this private transaction.

Pee

Speak to an accountant. I think you can register to have all the rent paid to one of two joint owners. (I have been told you can, although I do have to say I know nothing at all about it.)

lolarentt

My accountant has told me definitley that you can't do this. If the property is in joint name then both are liable for tax, regardless of who actually get's the revenue. We have a property which we own jointly but the letting agent has only my partner on the contract, and she get's all the revenue. My accountant tells me we are both liable for tax on the income despite this. Apparantly the rules on this changed 2 or 3 years ago - previously it would have been OK.

We have a significant mortgage on the house in question so it's not a great issue for us!

Kynthia

Hi

I've been told that for income tax purposes, joint owners who aren't married can chose not to split the income 50\50. It's alot more difficult if you are married/civil partnered. Ring your local tax office about what do do with your self assesment.

I found both of these links interesting:

http://www.taxcafe.co.uk/articles/letsgettogether.html
http://www.taxexpert.co.uk/property_tax/buy_to_let.php

liddesdale

Thanks guys

Will speak to an accountant and look at having the house transfered into my mothers namel.

Kynthia

liddesdale wrote: »

Will speak to an accountant and look at having the house transfered into my mothers namel.

I don't think you have to transfer your half of the property to your mother. just get an agreement in writing that she is currently receiving all the profit. There may be Capital Gains Tax implications if you give her half the property.

Definitely talk to an accountant or Tax Advisor.