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Unequal division of income from rental properties / Statement of Trust - advice needed
louthompson
Posts: 4 Newbie
Hi, I will try and keep this as short as possible.
Me and my husband own two rental properties, jointly, and personally (ie not through a limited company).
He earns more and is in the higher tax bracket. I now earn little and am in the lower tax bracket.
With the tax changes being implemented on the mortgage relief for landlords we are now finding much higher (almost crippling) tax bills and much less profit.
It would be beneficial for me to declare the bulk of the rental income if possible.
We have had independent advice to get Statements of Trust so that the beneficial ownership is in unequal amounts.
Last year our accountant advised us that this would be fine, and I could then declare more of the profits on my tax return (eg a 90/10 split rather than 50/50).
We have come to the point now where we want to put these statements of trust in place, but our accountant is now being a bit cagey and keeps saying "the position has changed" and I should seek legal advice because its now apparently become a grey area.
The solicitor I have contacted about the statements of trust, and to ask for advice, has told me that she can advise me from a legal perspective, but my accountant should know about the tax implications of me declaring more of the profits than my husband.
The accountant still won't give me a straight answer as to whether the Statement of Trust means that I can officially and legally declare 90% of the profits to myself. He just keeps saying "the position has now changed" and is now different to the advice that he gave me previously, but won't seem to expand any further on that when I ask him. He just keeps saying "seek legal advice".
The solicitor is insistent that the accountant should be able to tell me whether or not the Statement of Trust would be sufficient evidence to show HMRC, should they come a-knocking and ask why we're now declaring the profits unequally, when they have previously been 50/50.
I'm stuck in the middle with no knowledge of law or tax.
Does anyone know why my accountant is suddenly so reluctant to advise? What does he mean that "the position has changed"? Does he know something that the solicitor doesn't, and is she the one giving me out of date advice?
I am COMPLETELY confused.
If anyone can give me a straight answer or any kind of useful advice, I would be eternally grateful...
Thanks in advance.
Me and my husband own two rental properties, jointly, and personally (ie not through a limited company).
He earns more and is in the higher tax bracket. I now earn little and am in the lower tax bracket.
With the tax changes being implemented on the mortgage relief for landlords we are now finding much higher (almost crippling) tax bills and much less profit.
It would be beneficial for me to declare the bulk of the rental income if possible.
We have had independent advice to get Statements of Trust so that the beneficial ownership is in unequal amounts.
Last year our accountant advised us that this would be fine, and I could then declare more of the profits on my tax return (eg a 90/10 split rather than 50/50).
We have come to the point now where we want to put these statements of trust in place, but our accountant is now being a bit cagey and keeps saying "the position has changed" and I should seek legal advice because its now apparently become a grey area.
The solicitor I have contacted about the statements of trust, and to ask for advice, has told me that she can advise me from a legal perspective, but my accountant should know about the tax implications of me declaring more of the profits than my husband.
The accountant still won't give me a straight answer as to whether the Statement of Trust means that I can officially and legally declare 90% of the profits to myself. He just keeps saying "the position has now changed" and is now different to the advice that he gave me previously, but won't seem to expand any further on that when I ask him. He just keeps saying "seek legal advice".
The solicitor is insistent that the accountant should be able to tell me whether or not the Statement of Trust would be sufficient evidence to show HMRC, should they come a-knocking and ask why we're now declaring the profits unequally, when they have previously been 50/50.
I'm stuck in the middle with no knowledge of law or tax.
Does anyone know why my accountant is suddenly so reluctant to advise? What does he mean that "the position has changed"? Does he know something that the solicitor doesn't, and is she the one giving me out of date advice?
I am COMPLETELY confused.
If anyone can give me a straight answer or any kind of useful advice, I would be eternally grateful...
Thanks in advance.
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