Can I use my Personal Allowance against the house rent?

mrsbun2002

Hello

My Husband purchased our home in November 1999, and I moved in in October 2001. We married in August 2002, but the home remained in his name. The mortgage was an Offset mortgage.

I stopped working when we had our baby in 2005, and from 2008 onwards worked occasionally in a Self Employed basis as a Courier and Election Duties (Polling Station, counting votes etc). I have completed Self Assessment for all these jobs but have never had to pay tax . Following a diagnosis of our son having Autism I have given up most work except the Election Duties, as I have to be present at my sons school on a regular basis, and his schooling is on a "reduced hours" basis accordingly with his condition .

We are now buying a new home to move into, which will need loads of work prior to us moving in (we had been looking for a renovation project for some time), as its been empty for 3 years. The new home is larger and more suitable for our son, and is nearer a special school. Our current mortgage only had about £20k left, and we borrowed 2/3rds of the new mortgage against our current property on a Buy-to-let basis. At the same time my name was added to the title deeds on the current property, and the new property is in both names too.

Can we let our current property with me as Landlord, using my full Tax Allowance, or do we have to split it 50/50 between us?

I am in Scotland - not sure if it makes any difference

G_M

If you and husband jointly own the property, then the rental income is split between you. You are joint landlords.

The tax you each pay is dependant on the amount you can offset against the rent. Allowances are given by the HMRC here.

ognum

If the house is owned jointly then the tax is payable jointly.

maybe the best answer is when you move into your new home to transfer the mortgage to that and have no mortgage on your rental property then transfer that into your name only then the whole rent will become yours for tax purposes and you can set it against your personal allowance.

Kynthia

When you're married the HMRC expects a 50:50 split in rental income if you jointly own the property. If you're not married to the other joint owner they are more flexible.

However I think there is something more complicated you can do by making it so you own 99% and then filling in some forms to the HMRC about splitting the income 99:1. You might want to get advice from a professional if it's financially worth it.