Buy-to-let income and tax query.

Pyttspete

Hi all.

I recently helped my daughter to purchase a small buy to let property, by lending her 50% of the purchase price. The mortgage is in her name as is the title. In return she wants me to manage the property and to take all the income after outgoings - mortgage, insurance etc.

If I enter into a legal agreement with my daughter would this be acceptable to the IR? The mortgage interest would be a problem as clearly only she would be able to claim the tax relief.

As an alternative could I send her a bill for professional services each year that would be equal to the profit she would make on the rental of the property?

And thoughts and observations would be most welcome!!!

PP

00ec25

NO and NO

she is the legal owner , the income is hers and not yours

she can claim the mortgage payment against HER tax liability - note that includes any INTEREST (only, not capital) payments she makes to you

she can pay you a wage for managing the property but she cannot evade her tax liability. If she pays you a wage then obviously that wage becomes your taxable income