rental income, can my wife use her tax alowance?

Logan008

we have just started renting out our old property, my wife isn't on that properties land register as I bought it before we met. we lived there for 15 years.


my wife earns less than her tax allowance, so is it possible to use her remaining allowance to offset the tax on the properties rental income? or would she need to be added to the properties land register.

booksurr

she is not an owner therefore has no entitlement to income produced by an asset she does not own - marriage notwithstanding. The income is all yours against your tax never hers

also if you now make her an owner then if/when you sell you capital gains tax position will be significantly worse because she will not get any private residence relief or letting relief since she was not an owner when she lived there

therefore you face the normal balancing act common in such circumstances, reduce income tax now by making her an owner versus pay more CGT at a future date - your choice based on when you expect to sell and how much income tax you will save in the meantime, only you can answer that question...

Logan008

we had planned to sell it in about 18 months, when the fixed term mortgages come out of there fix, but im now wondering if I would be better off selling now and paying the early repayment charge on the mortgage.


the house was bought for £35000 and is now worth about £110000.

booksurr

Logan008 wrote: »

the house was bought for £35000 and is now worth about £110000.

the mechanics of the calculation are simple - follow these examples:

https://forums.moneysavingexpert.com/discussion/5033954

https://forums.moneysavingexpert.com/discussion/5046487