Partner receiving income on let property

PoPo_UK

Hello everyone!

I'm new around here and looking for some advice. I'm in a situation where I currently own a property outright. I'm just about to purchase another property with my long term partner as our family home. I am currently letting my property and receiving the income from it which I am paying tax on.

When we move in together I want to either add her to the ownership of my current property or declare a deed of trust for her. Ideally I'd like for her to be able to receive the income as she is in a lower tax band than me and the money will be going to pay for our joint mortgage on the new place.

I know if we were married the situation would be fairly simple but neither of us are interested in that at the moment I'd like to explore what our options are as common law partners.

What would be the best way for us to minimize the income tax on the property for our current situation?

We seem to be a rare situation as everything I can find on the subject seems to be about sharing your current property.

Hoping you can give me some advice!

00ec25

no such thing as "common law" partners. you cannot find anything because your "situation" is covered by the basic rules around unrelated persons

if she acquires a beneficial interest in the property and thus the right to declare the income and profit from its renting that counts as a disposal of your interest and will trigger Capital gains tax calculation for you on your disposal of the interest to her,

a dec/deed of trust is merely the legal evidence of a beneficial interest ....

you need to crunch the numbers to see if your one off lump sum CGT liability will outweigh the advantage obtained due to her paying less income tax than you currently do on the rent over the foreseeable future.

there are still some tax advantages to being legally married, CGT is the biggest one where it shows up

le_loup

PoPo_UK wrote: »

I know if we were married the situation would be fairly simple but neither of us are interested in that at the moment I'd like to explore what our options are as common law partners.

Fantastic! You want to give her half your assets but not a ring. What is it with today's unmarried people?

Keep_pedalling

le_loup wrote: »

Fantastic! You want to give her half your assets but not a ring. What is it with today's unmarried people?

That is a bit judgmental, but certainly for tax purposes it would make sense to get married unless the OP likes paying CGT, or leaving a IHT bill for their surviving partner.

The OP and his partner should also make sure they both have wills in place.

POPPYOSCAR

le_loup wrote: »

Fantastic! You want to give her half your assets but not a ring. What is it with today's unmarried people?

Nothing wrong with that.

Not everyone wants to be married. We did not and only got married in the end for financial reasons.

And no rings.