Who is liable for Tax

superM

Hi.

I have a BTL property and mortgage on it.

If I transfer the tenancy agreement to my brothers name and tenant pays the rent directly into his account. Who will be liable for the tax?

Thanks

Blackbeard_of_Perranporth

Question. Do you get an income from your investment?

If yes, you pay the tax.

Bluebirdman_of_Alcathays

!!!!!!. Whilst people moan about faceless corporates, I would much prefer property was left to the professionals like in Germany.

booksurr

superM wrote: »

Hi.

I have a BTL property and mortgage on it.

If I transfer the tenancy agreement to my brothers name and tenant pays the rent directly into his account. Who will be liable for the tax?

Thanks

in principle both of you would be liable for tax on the same "rent"

- you are the owner so have the absolute entitlement to income from your investment. With entitlement comes liability

- brother is in receipt of untaxed income ...

uknick

Taken from here;


https://www.taxinsider.co.uk/1524-Transferring_Rental_Income_Anti_Avoidance_Problems.html


Transferring income only
In the above example, instead of transferring a 10% property interest to the child, the parent may wish to transfer the right to a proportion of rental income instead, based on the assumption that the income will be treated as the child’s for tax purposes, at the cost of perhaps a small capital gain for the parent on disposal of the right.

However, such an arrangement is potentially ‘caught’ by income tax anti-avoidance legislation regarding ‘transfers of income streams’ (ITA 2007, Pt 13, Ch 5A). This legislation applies broadly where a right to ‘relevant receipts’ (which could include rental income) is transferred to another person without a transfer of the asset (i.e. the property) from which the income arises (ITA 2007, s 809AZA).

If these provisions apply, the person making the transfer is generally chargeable to income tax on a ‘relevant amount’ in the same way, and to the same extent, as the relevant receipts would have been chargeable but for the transfer of the rights to the income stream (s 809AZB).