Tax credits- rental income

Susanne1318

Hi could some advise me on the below?

I jointly own a property with my sister which we are going to be renting out. I know have to declare this to HMRC and do a self assessment at the end of the tax year. My sister does not want any profit from the income(there is only about £20 after expenses etc) does she still have to do a self assessment as well even though she won't be receiving any financial gain from it?

Scottie71

Hi,

Me and my wife have just bought another house. Our current house has proved difficult to sell at asking price so we are considering renting it out as an alternative to dropping the price. It appears that after expenses we would make approx £250 a month over our interest payments. I am employed and my wages approach the higher tax bracket. My wife is certified self employed (child minder) but since having our children she has not worked so has had no income for last 3 years. She has maintained paying her NI contributions throughout her period of not working. Can she claim the rental income as hers, potentially we could argue that any issues with the rented house will be dealt with by her, therefore in a way it will be her 'job'. This would mean we would keep most, if not all, as she would remain under her tax relief amount. I mentioned this briefly to a mortgage advisor and his view was that it would have to be classed as my income. Is this true??
Both properties would be in joint names, however, we would considering changing this if it would help our situation. Any avice would be appreciated, Cheers

rabbit_burrow

Susanne1318 wrote: »

Hi could some advise me on the below?

I jointly own a property with my sister which we are going to be renting out. I know have to declare this to HMRC and do a self assessment at the end of the tax year. My sister does not want any profit from the income(there is only about £20 after expenses etc) does she still have to do a self assessment as well even though she won't be receiving any financial gain from it?

Yes. Regardless of whether there is profit or not, a self-assessment must be completed each year. You will most likely need to register as partnership/llp instead of the sole-trader status.