Transferring Rent to my wife

francohoops

Hello

My sister and I own a house which has been converted into 2 flats which are rented to a local housing association. My sister and I have set up a joint bank account into which the rent is paid each month. The property is held in joint names.

From this account a share of the income is transferred into my personal current account.

My wife doesn't work as she is a full time mum. What I would like to do is transfer the income (c£7k p/a) to her, so that we pay less tax on it, as she would use up her personal allowance.

What do I have to do to prove to HMRC that the income is going to my wife and is hers? It doesn't matter which one of us gets it as it goes towards paying off our monthly bills. Would transferring it to her bank account suffice? Or would I have to proof anything further? Is there anything else that I need to consider before arranging this? She'd have to complete a tax return, but would there be anything else?

Thanks for your help

F

francohoops

I should add that I am employed, and hence the idea of reducing our overall tax liability.

F

CLAPTON

if she doesn't own the property then the income can't be hers for tax purposes

Pennywise

For a married couple, the rental profits are taxed in accordance with the ownership share regardless of who receives the money. To get some or all of the rental profits taxed on your wife, you'll have to transfer the ownership of all or some of the property over to her. If she owns it 100% then she gets taxed on all the profits - if she owns 50% then she gets taxed on 50% of the profits.