Buy to let tax share?

Barry_Bear

If a married couple are both on the deeds for 2 properties they let out can they total the rental income from both and each pay tax on 50% of the rental income? 
Sharing the rental income would avoid either paying a higher rate tax. Or does one have to put the full rental income on their SA tax return?

[Deleted User]

They own the properties 50:50 - I don’t understand why either would declare the full income from both on a single SA return. Each person puts their share ( in this case50%).of income and expenses from both properties on their individual return.

flashg67

We had 2 BTL poperies until recently and we just divided income & expenses by two for our own tax returns

oldbikebloke

the CORRECT answer, given they are married, is the tax liability will be 50/50 UNLESS they have notified HMRC in writing that they wish the rental profits to be split not 50/50.
If they do make such a statement, then HMRC would expect the underlying entitlement to reflect such a split, ie, they own as tenants in common in that exact % split.

Jeremy535897

A married couple jointly owning a buy to let property will always be taxed on 50% of the income each, unless the documentation states specifically that the ownership is not 50% each, and a form 17 has been filed to this effect with HMRC.

[Deleted User]

Jeremy535897 said:

A married couple jointly owning a buy to let property will always be taxed on 50% of the income each, unless the documentation states specifically that the ownership is not 50% each, and a form 17 has been filed to this effect with HMRC.

Yes - given that the op has stated that the share is 50:50 I just don’t understand the final question on the first post.

macman

The OP hasn't stated that the ownership is 50/50. They just stated that they are both 'on the deeds', which tells us nothing. 

Jeremy535897

macman said:

The OP hasn't stated that the ownership is 50/50. They just stated that they are both 'on the deeds', which tells us nothing. 

Yes, but as I pointed out, even if it is not owned 50:50, it is taxed 50:50 until a form 17 is filed with HMRC setting out the true percentage owned by each spouse.

[Deleted User]

Jeremy535897 said:

macman said:

The OP hasn't stated that the ownership is 50/50. They just stated that they are both 'on the deeds', which tells us nothing. 

Yes, but as I pointed out, even if it is not owned 50:50, it is taxed 50:50 until a form 17 is filed with HMRC setting out the true percentage owned by each spouse.

Exactly my point - by doing nothing the property income was already shared 50:50.

Barry_Bear

Thanks for the replies. I had not considered that a property could be owned in other than 50:50 share, so that's in interesting point.
If they each owned one property entirely rather than owning both jointly, then I assume each just files the rental income for the property they own.
I am thinking that there may be ways to reduce tax overall if one has more taxable income from other sources.

Jeremy535897

Barry_Bear said:

Thanks for the replies. I had not considered that a property could be owned in other than 50:50 share, so that's in interesting point.
If they each owned one property entirely rather than owning both jointly, then I assume each just files the rental income for the property they own.
I am thinking that there may be ways to reduce tax overall if one has more taxable income from other sources.

You can own a property in any proportions you like, by making the joint ownership a tenancy in common and specifying the proportions of ownership in the documentation. You then have to file a form 17 with HMRC if you are a married couple, or you still get taxed 50:50. There is no capital gains tax if a married couple alter hw thy own a property jointly, but there can be stamp duty if th property is mortgaged (unlikely until the stamp duty holiday ends).

If you do not own any part of a property, of course you cannot be taxed on the income arising from it.