Can we limit our tax liability when renting out a room

Lindseyb1963

We are buying a 2 bed flat with a mortgage in joint names for our son to live in, renting out the 2nd bedroom to one of his friends. I am a non tax payer but my husband is a higher rate tax payer.
Is there any way we can limit our tax liability for the rental income rather than pay the top rate, bearing in mind I do not pay any tax? The Rent a Room scheme will not apply as it is not
our main home.

00ec25

why do you need the income? Let your son have a lodger then the income belongs to your son, not to you. Does the lender know you apparently cannot afford to pay the mortgage unless you receive rent from a tenant?

if that is unpalatable to you then no, the income must be split 50/50 if owned as joint tenants between you and husband or, if owned as tenants in common, be split according to whatever share each of you owns

if you want to vary the % then you must be TIC and have made a Declaration of Trust where your husband "gives" you a higher % of the income. You will both need to sign a Form 17 and send it to HMRC along with the DoT

anselld

You can buy in joint names, Tenants In Common, with you owning 99%. Submit Form 17 to HMRC and then you have 99% of the income.

You will still pay 3% SDLT surcharge for second home though.

anselld

The DoT can be made in Section 10 of the TR1 at the point of purchase. It does not need to be a separate document.

sheramber

Have you reserached the regulations that apply to a landlord?

theartfullodger

Limit tax liability?

Yeah, easy!

Rent for very low rent:. Very low or no extra tax!

No need to thank me!