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who pays income tax ?

nellienellie
nellienellie Posts: 16 Forumite
in House buying, renting & selling
I own a house that I want my daughter to rent out for me. She will take full control, and will receive the full rental income. When it comes to paying income tax, will it be seen by the hmrc as my responsibility to pay the tax, as owner and landlady, or my daughters as she is receiving the income.
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Comments

  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    nellienellie wrote: »
    I own a house that I want my daughter to rent out for me. She will take full control, and will receive the full rental income. When it comes to paying income tax, will it be seen by the hmrc as my responsibility to pay the tax, as owner and landlady, or my daughters as she is receiving the income.



    You own the house so you must pay the tax as I understand it. Simply saying your daughter is in charge and therefore takes all the income is fraud. You are on the deeds, not your daughter.


    You could set up a limited company and offset tax by paying her an income to manage your property.
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    If your daughter is receiving the income, then your daughter is responsible for paying tax on the income. It's that simple.
  • wwl
    wwl Posts: 316 Forumite
    Perhaps you could rent it to her for a nominal amount (on which you pay tax), and she sub-lets it, and pays tax on the rental income.
    Probably worth talking to an accountant to set things up to work the way you want.
  • LandyAndy
    LandyAndy Posts: 26,377 Forumite
    Part of the Furniture 10,000 Posts
    edited 18 September 2015 at 8:45AM
    AdrianC wrote: »
    If your daughter is receiving the income, then your daughter is responsible for paying tax on the income. It's that simple.


    I agree with this.

    The HMRC aren't interested in whose assets are generating income, just who is receiving it.

    It's INCOME tax and the income is hers.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    nellienellie wrote: »
    I own a house that I want my daughter to rent out for me. She will take full control, and will receive the full rental income. When it comes to paying income tax, will it be seen by the hmrc as my responsibility to pay the tax, as owner and landlady, or my daughters as she is receiving the income.
    She's basically acting as a letting agent with one property on her books.

    If she's keeping all the cash for herself then I would assume she pays the tax. If she hands all of the cash over to you then you pay the tax. If she hands some of the cash over keeping some for herself as a fee to manage the property then you both pay tax.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • LandyAndy
    LandyAndy Posts: 26,377 Forumite
    Part of the Furniture 10,000 Posts
    csgohan4 wrote: »
    you own the house so you must pay the tax as i understand it. Simply saying your daughter is in charge and therefore takes all the income is fraud. You are on the deeds, not your daughter.


    is just wrong


    you could set up a limited company and offset tax by paying her an income to manage your property.


    will open up a world of problems


    . .
  • mrginge
    mrginge Posts: 4,843 Forumite
    Ahem....
    nellienellie wrote: »
    ...as owner and landlady

    Perhaps some clarification is needed?
  • tom9980
    tom9980 Posts: 1,990 Forumite
    Part of the Furniture 1,000 Posts Name Dropper I've helped Parliament
    nellienellie wrote: »
    I own a house that I want my daughter to rent out for me. She will take full control, and will receive the full rental income. When it comes to paying income tax, will it be seen by the hmrc as my responsibility to pay the tax, as owner and landlady, or my daughters as she is receiving the income.

    This is not clear enough.

    1. Will the daughter be living in the property?

    2. Will the rental income be hers and hers alone to spend as she wants?
    When using the housing forum please use the sticky threads for valuable information.
  • LandyAndy
    LandyAndy Posts: 26,377 Forumite
    Part of the Furniture 10,000 Posts
    nellienellie wrote: »
    I own a house that I want my daughter to rent out for me. She will take full control, and will receive the full rental income. .
    tom9980 wrote: »
    2. Will the rental income be hers and hers alone to spend as she wants?


    I have to admit I thought that implied 'and will keep it'
  • nellienellie
    nellienellie Posts: 16 Forumite
    I am landlady as my local council would only issue landlord/lady certificate to registered owner. We have no desire to do anything illegal,but I do not want to get involved in the day to day affairs of renting out,therefore my daughter will be taking on this and will be getting the profits.
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