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How to buy-to-let with my mum (for my sister!)??
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Here's a naughty tax tip.
As it is your relations renting this property, you can take both cash, and funds into your bank account/s.
So, if the market rent is £450, you might take £350 into your bank a/c, and £100 cash.
That way you only pay tax on the £350, because that is the part listed on your bank statement/s if you are ever inspected. The other £100 didn't happend.
It reduces your tax bill, and you can argue that £350 is a high enough rent if the IR ever question this. (You couldn't say £200 for example, because that would be clearly too cheap.)
OK, it isn't perfectly kosher, but look how many people provide accomodation within their familiy, and who's asking if rent does or does not change hands within a familiy?
Does a father have to pay tax on the £25 a week housekeeping his son pays? Do you see?
For example, perhaps one could even say "I don't charge rent because this is my mother we are talking about - I'm helping her out", and that kind of thing. The truth is, many people DON'T charge rent within the family. For the IR to tax intra-family transactions is pretty bad, don't you think?0
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