Rental income - declaration of trust

Equaliser123

Hi

I have a property that is let out. The property is 100% in my name. I am a higher rate taxpayer and my wife doesn't pay tax.

I've declared a trust over the rental income so that 70% of it goes to her.

My question relates to my tax return (and hers).

Do I simply declare the rental income (i.e. 30% that I receive) and she declare hers (i.e. 70%) or do I declare it all. If I declare it all, where on the tax return do I state that she then receives it under trust?

I believe it to be just the income I receive but any confirmation gratefully received.

jimmo

A Declaration of Trust enables you to transfer beneficial ownership of something to somebody else without changing the legal ownership. That something could be an asset such as a house or cash (from your taxed income). What you cannot do is give away your tax liability without giving up ownership of the underlying asset. That somebody else could be your wife or the trust itself
Depending on what your Declaration of Trust has achieved you may, or may not, be liable to Capital Gains Tax on your disposal of the property. You may have reduced your liability to Income Tax on letting income to 30% or you may still be liable on the 100%.
Impossible to advise further without knowing the exact wording of your Declaration of Trust. Take a look at examples 1 to 9 here.
https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem9900

Sibbers123

You should split the income 50:50 unless you have completed form 17 (within 60 days of the declaration) and sent it to HMRC.