Rent to my wife?

johnfrench10

Hi

I have a house that is in my name that I currently rent out. My wife doesn't work.

I was thinking of renting the house to my wife at a low rent that covers the buy to let mortgage costs so that I don't make any profit on it (hence to tax to pay). My wife would then sub-let the house at market value. The rental income would be hers and she would not have to pay tax as the rental income would be below the threshold.

Is this possible or legal?

As an alternative, my wife has a company in her name from when she used to be self employed. Could I rent the house to that company which would then sublet as before.

Thanks for your help.

RAS

You would probably find both options got you into hot water with your mortgage provider.

AdrianC

So, basically, you're wondering if some kind of round-the-houses complication designed specifically and solely to avoid tax is possible or legal...?

Even if your lender would be happy with it (clue: they won't be), what do you think the likelihood of HMRC not seeing straight through it is?

csgohan4

I would give it go. Let us know how it goes from jail.

theartfullodger

So you think you should be able to pay less the tax than the honest man/couple?? Don't think we want people like that in our fair country...

Hardly those good old British traditions of decency & fair-play...

xylophone

Is your non-earning wife under 75 and not contributing to a pension?

Give her £2880 per annum from your income and
her pension provider will claim tax relief of £720 - provision for the future and an indirect tax rebate for you......

Carl31

If you were to allow your wife to rent your house at the mortgage rate, which i would expect is below Market rate, then she would probably be deemed to be receiving a taxable income on the difference, in addition to her rental income

silvercar

johnfrench10 wrote: »

Hi

I have a house that is in my name that I currently rent out. My wife doesn't work.

I was thinking of renting the house to my wife at a low rent that covers the buy to let mortgage costs so that I don't make any profit on it (hence to tax to pay). My wife would then sub-let the house at market value. The rental income would be hers and she would not have to pay tax as the rental income would be below the threshold.

Is this possible or legal?

As an alternative, my wife has a company in her name from when she used to be self employed. Could I rent the house to that company which would then sublet as before.

Thanks for your help.

A far simpler option would be for you to rent out the property and employ your wife to manage it for you. Her charges for management would eat into your unwanted profit and give her some income.

G_M

Why not simply give the property to your wife? Or would she not be eligible for a BTL mortgage?

Or tansfer it into joint names as Tenants In Common at 99/1%? She would then receive 99% of the rent and you would receive 1%.

kinger101

Not worth the hassle. The bank or HMRC are unlikely to be happy with this arrangement. Just pay what you owe. Or give your wife the house outright rather than treating her as a tax shelter.

It can be a false economy to !!!! the HMRC off over the sake of a few hundred quid tax. You'll end up paying this back to accountants once they start rummaging though your previous years.