Will we have to pay tax on property which will be let?

seven-day-weekend

I wrote to the Inland Revenue five years ago when we started to rent our family home and told them it was in Joint Ownership but the rent comes solely to me (A non-taxpayer). They answered other points in my letter but said nothing about that aspect.

Every year I send them a spreadsheet with the income and expenses on it (in my name ) and they have never ever questioned this.

So I think it must be OK.

whiskywhisky

Pumkinface/Sevendayweekeknd = thanks for those comments.

Pumkinface - those links were great, and it does sort of state that if married/partnership than the income should be equally shared.

Sevendayweekend - This is what the HRMC helpline said, but the lady I spoke to did sort of sound like she just wanted to give me a quick answer without listening to the full story.

So annoying this - as so many publications say different things.

We are sort of inclined of putting the property in my wifes name, we have little babies therefore my wife is not expecting to work for a few years. Our only issue is obviously if in a couple we decide to sell, then we only have 1 persons Capital Gains to play with.

Pumpkinface_2

seven-day-weekend wrote: »

I wrote to the Inland Revenue five years ago when we started to rent our family home and told them it was in Joint Ownership but the rent comes solely to me (A non-taxpayer). They answered other points in my letter but said nothing about that aspect.

Every year I send them a spreadsheet with the income and expenses on it (in my name ) and they have never ever questioned this.

So I think it must be OK.

Would they know from your spreadsheet what the house ownership is?

The tax system is self assessment. Because you have been doing something and nobody has queried it so far does not mean it is necessarily correct. I have so far found nothing to support this being within the rules and would recommend OP looks into it a bit further.

seven-day-weekend

Pumpkinface wrote: »

Would they know from your spreadsheet what the house ownership is?

.

No, I don't suppose they would actually, although as I say, I did inform them five years ago that it was in joint names.

Pumpkinface_2

whiskywhisky wrote: »

We are sort of inclined of putting the property in my wifes name, we have little babies therefore my wife is not expecting to work for a few years. Our only issue is obviously if in a couple we decide to sell, then we only have 1 persons Capital Gains to play with.

That one should be easy to solve. Your wife could make a transfer to you before you sell, which is allowable between spouses and has no CGT implications and then you sell and have both CGT allowances.

seven-day-weekend

Pumpkinface wrote: »

That one should be easy to solve. Your wife could make a transfer to you before you sell, which is allowable between spouses and has no CGT implications and then you sell and have both CGT allowances.

My husband did this with a property he inherited. About a year before we sold it he had my name put on the deeds as well as his own. (Although as it turned out he would not have had to pay any CGT anyway).

ceeforcat

That one should be easy to solve. Your wife could make a transfer to you before you sell, which is allowable between spouses and has no CGT implications and then you sell and have both CGT allowances.

Please do not take this literally- you cannot transfer a property in joint names or from joint names into sole names if the sole intention is to avoid CGT. In all my years in tax, this is the most common error I see in property transactions and one HMRC will jump upon. Do the transfer at least a year before advertising for sale and make sure that it is formal - a solicitor should do it reasonably cheaply. If asked subsequently do not under any circumstances state that the transfer was made to reduce the tax bill.

whiskywhisky

I realiase from just a few lines you cannot fully appreciate my predicament.

But if you guys were planning for long term let - would you put the property in the wife's name??

00ec25

whiskywhisky wrote: »

But if you guys were planning for long term let - would you put the property in the wife's name??

YES, subject to the following:
a) she will never again go to work otherwise the Income tax saving at the moment is irrelevant and you may as well joint own becuase .... b) if you split it will be easier to administer than if its solely in her name;

c) you have wills which deal appropriately with who gets "her" house - will it jump straight to your children?

d) ultimately you transfer it to joint to reduce eventual CGT but only as advised well in advance of selling up

whiskywhisky

Will stick to having the property solely in wifes name.