Using wife's allowances

stphnstevey

I am a higher rate taxpayer, my wife is still a basic rate taxpayer - in what ways could we make use her allowances?

Part of my income is a car allowance.

We have a few BTL properties and some savings.

jem16

You will not be able to use any of your wife's allowances. The only allowance which could be split is the Married Couple's Allowance for those born before 1935 which I'm assuming does not apply to you.

One way you could help yourself is to put all of your savings into your wife's name as then you would not be liable to the higher rate tax on your half of the interest.

Don't know about BTL implications sorry.

Pennywise

You could transfer the BTL's into your wife's sole ownership, but that would involve legal fees and maybe the transfer of the mortgages into her name aswell, incurring even more fees. Probably cost more than the tax savings! But food for thought if you're planning to buy more BTL's. Assuming you are legally married and she is not a common law wife.

stphnstevey

I'm sure I read somewhere that as long as it's bought in joint names, you can declare to the tax office what percentage of the income each of you recieves. Therefore bypassing the need to change any legal documents?

Any accountants out there?

Otis

If the property is held jointly then the income does not have to be shared in the same proportion as the ownership, but you should be consistent in the sharing arrangement. If the property is all in your name, then it may still be worth transferring half to her. It depends on how close she is to the higher rate threshold. (And how close she is to discovering the mistress )

Joint ownership also means that you would effectively have double the capital gains tax allowance if/when you sell the properties, if lettings relief doesn't cover the whole gain.

You don't specify whether you are self-employed or a director - you could put her on the payroll and reduce your earnings accordingly if you had that degree of control over the business.

All in all, you might still be best off talking to an accountant, even just for a one-off piece of advice.

stphnstevey

Hi, Thanks for your advice, much appreciated.

So effectively I could declare to the tax office that my wife is receiving 100% of the BTL income, despite us owning a 50:50 share each?

Any good links where I can look this sort of information up?