Tax on rent income paid to ex

squeekswhenwalking

Please could anyone advize? I have a house in my name, and want the rent to be paid to my ex wife for a few years as a form of maintenance. However I've been told that even if it's paid directly to my ex, I'm still liable to pay tax based on it being an income. Anyone know if this is right? Or a way around? Thanks for any help

*~Zephyr~*

Yes it's right. All income is taxable.

A way around? You mean tax fraud? This is not the best place to ask that question.

You can offset legitimate expenses such as mortgage interest, LL insurance etc against rent to reduce your tax bill, but the remaining income is taxed.

How long have you been renting the property out?

CLAPTON

squeekswhenwalking wrote: »

Please could anyone advize? I have a house in my name, and want the rent to be paid to my ex wife for a few years as a form of maintenance. However I've been told that even if it's paid directly to my ex, I'm still liable to pay tax based on it being an income. Anyone know if this is right? Or a way around? Thanks for any help

you can give her the house, then she will be taxed on the rent and not you

Nick_C

Tax avoidance isn't illegal.

Perhaps you could lease her the house for a peppercorn rent, then the income becomes hers?

benjus

Tax liability for rental income would normally be split according to the ownership of the property (i.e. 50/50 in the case of joint tenants, but if you're tenants in common the ownership on the deeds will specify the ownership shares). Moving (if necessary) to being tenants in common, and reducing your ownership proportion to a very low percentage would shift most of the tax liability for rental income to your ex.

Nick_C

booksurr wrote: »

- you, and you alone are liable for income tax on the rental profit since you are the only person with an entitlement to it

- the only way to alter that would be to sell/give your ex a legal share of the property.

Why don't you think leasing the property to the ex wife for a peppercorn rent would work? If she had the right to rent out the property, then surely the income would be hers?

patanne

Would you not have insurance problems doing it that way.

Why not sell her 1% of the property and then, provided she is completely an ex I believe she can receive any percentage of the rental income. This will of course be taxable, and deductible from any benefits which maintenance would not. That way it could end up more expensive all round.