Bank account for jointly owned property

ian7526

I jointly own a property with my three siblings and myself – one quarter each, which we are planning to let as a holiday lets
I need to set up a Bank account to receive rental income and make payments for direct debits and bills on the property
I am going to run this for the four of us, but we will contribute equally to any funding and will all own one quarter of any balance in the account.
I want to run it by Internet banking
What is the best sort of account to go for? How do I protect my siblings’ interests, and myself from paying tax on the entire account. Any advice welcome please.
Thanks.

Archi_Bald

You need to treat this as a business (since it is one), with a business account, and have written terms laid out between the 4 of you. You should also all make wills.

Mr_Goodkat

Is the property owned outright by the four of you or is there any mortgage?


If there is a mortgage - interest only you can offset this against any income to reduce the tax you are required to pay along with things like repairs etc if it is a repayment mortgage then you can only the offset the interest element.


You need to consider how this property is held - is it just as four individuals or do you have a partnership or limited company holding the asset?


You need to think carefully about how you hold this property and how you protect yourselves individually and collectively so ensuring a legal agreement is in place is essential. This agreement needs to cover potential exits if one of your siblings wanted out and decision making process.


You will need a business account to run this as you would be falling foul of personal accounts T&C if you tired to open or use an existing personal account for this.


Good luck

ian7526

Thanks guys - very useful points.
The property is held by us as individuals - we do have a gela agreement covering what happends if one of us wants to leave going back to 2003 when we first owned the property, and there is no mortgage.

Would there be any advantage in setting up a limited company for the purpose? The bank account is required for a new agent - we have let the property before using an agent managed account, and have just split the income and tax liability equally between the four of us.
Ian

xylophone

Transfer to a company http://www.hmrc.gov.uk/manuals/sdltmanual/sdltm30220.htm
would be worth a look.