Rental Income in Spouses ISA

Magicnumbers2018

Basically Rental income split 70/30. Tenants in Common.
I declare 30% of rental income and pay related income tax.
Spouse declares 70% of rental income and pays related income tax. Therefore correct tax paid.
BUT 100% of the rental income has been recived and invested in ISA,s in my wife's name.
Therefore I am paying tax on income I have not received.

Question is that I would like to get access to the 30% of the rental income I have paid tax on and how do I do that? Should I involve HMRC as I have declared this income for past 10 years,

Linton

You received the 30% of the income you were due and were taxed accordingly. You then gave the money to your wife who put it in her ISA. Why do you think that you should not be taxed on money you give to your wife?

Perhaps it would be beneficial if you gave your 30% to the Mrs.

AnotherJoe

Magicnumbers2018 wrote: »

Basically Rental income split 70/30. Tenants in Common.
I declare 30% of rental income and pay related income tax.
Spouse declares 70% of rental income and pays related income tax. Therefore correct tax paid.
BUT 100% of the rental income has been recived and invested in ISA,s in my wife's name.
Therefore I am paying tax on income I have not received.

Question is that I would like to get access to the 30% of the rental income I have paid tax on and how do I do that? Should I involve HMRC as I have declared this income for past 10 years,

Stop putting it in wife's ISA? Remove it from wife's ISA?
There are no tax implications, the fact it's gone into and (potentially) out of an ISA is irrelevant.
Am I missing something here ?

Magicnumbers2018

Hi I didn't word my post very well. The rental income goes directly into my wife's ISA so I don't actually receive the income but I am paying tax on 30% .I want to get access to the income but relationship issues.

eskbanker

Magicnumbers2018 wrote: »

Hi I didn't word my post very well. The rental income goes directly into my wife's ISA so I don't actually receive the income but I am paying tax on 30% .I want to get access to the income but relationship issues.

The fact that between you you choose/chose to pay the money into her ISA doesn't mean that it's not your income in the first place.

If the property is clearly defined as being 30/70 split then you're liable for taxation on your share of any resulting income, regardless of its ultimate destination on receipt.

You can presumably nominate to redirect your 30% elsewhere going forward if you want access to the cash but that still won't affect your tax liability either in the future or the past.

xylophone

The fact that all the income is paid into your wife's ISA is immaterial - you own 30% of the income and she owns 70% which you have correctly declared to HMRC.

If you want the money owed to you back from your wife, you can ask her for it but as you seem to have made a free choice to give it to her, she has no obligation to return it.

AnotherJoe

Magicnumbers2018 wrote: »

Hi I didn't word my post very well. The rental income goes directly into my wife's ISA so I don't actually receive the income but I am paying tax on 30% .I want to get access to the income but relationship issues.

My comment stands, its irrelevant if it goes in direct or via your bank account. It doesn't affect the tax position of that payment at all.

You need to post on the relationships forum, your issue clearly isn't a financial one. Perhaps its an assertiveness issue?

Herbalus

Could the issue be that the wife's ISA has a sort code and account number and the tenant is paying directly into this account?

In that case, the OP has never had access to the funds (though still pays income tax as if he does), and has a claim against his wife for his income that has been received by his wife (and not "given" to her for her ISA).

Alexland

If the relationship has broken down to the point that your wife is not allowing you access to matrimonial property then I guess the legal process might eventually assist you to separate the assets out and reach financial settlement.

https://www.moneyadviceservice.org.uk/en/articles/dividing-investments-and-savings-during-divorce-or-dissolution

Is the rent collected by an agent and if so can you instruct them where to put your 30%?

Alex

masonic

Report her to HMRC for tax evasion. She should be declaring all of the income she receives if she is keeping it all. Then take her to the small claims court. Job done!

Tom99

masonic wrote: »

Report her to HMRC for tax evasion. She should be declaring all of the income she receives if she is keeping it all. Then take her to the small claims court. Job done!

Is that best done before or after the divorce court?