Can my partner claim all the rental profit for tax purposes?

NOVAMET21

Hi
My partner is on lower tax bracket. Can the rental profit be claimed only in her name rather than both?

I read that we can split the rental profit but can she claim 100% so its only taxed in her allowance?

Thanks

[Deleted User]

Who owns the house

canaldumidi

If she is the sole property owner/landlady and receives the full rent, then yes.

Andthen07

canaldumidi said:

If she is the sole property owner/landlady and receives the full rent, then yes.

I'll take a punt and say she's not though. 

TripleH

Think of it this way, if (worse case scenario) there is an investigation by HMRC into both your tax affairs, can you show that all the rental money was paid to your partner?

Can you show that they did all the work and took all the risk?

Can you show that they put all the money in to buy the property?

If you can't, then they can't claim all the income. However, you don't have to split the income 50 :50. If they manage the property and do all the work then you can tilt the split very much in their favour.

If you invested more than 50% in the property, that would tilt the split a bit back toward you.

Sit down look at your paperwork and see what it says. In future it might make sense for your partner to take on running the property and becoming the 'landlord'

NOVAMET21

[Deleted User] said:

Who owns the house

Not bought the house yet. Just planning ahead. I have heard of tenants in common whereby we can split the share of the property but wasn't sure if we can fully use my wife's allowance for rental income.

NOVAMET21

canaldumidi said:

If she is the sole property owner/landlady and receives the full rent, then yes.

Not bought the house yet but planning to own in both of our names. 

gemma.zhang

If you split tenants in common 1:99. I know ppl who is doing it, so the low tax / no income one claims 99% on rental tax. 

Bluebell1000

gemma.zhang said:

If you split tenants in common 1:99. I know ppl who is doing it, so the low tax / no income one claims 99% on rental tax. 

We have done this. Be aware there may be capital gains tax implications on sale as you won't be able to make full use of the other person's CGT allowance.
You need to also fill in a separate form to notify HMRC of the ownership/income split. I can't remember the number of the form-17 maybe?

K_S

@novamet21 Assuming that you're a married couple, yes there are straightforward ways to achieve what you are looking to do. For better or worse, the UK tax code gives married couples a lot of flexibility with regard to income shifting.

You can also get around the CGT issue by drafting a new deed of trust (setting out a new split) and filing a new form 17 as many times as needed and prior to completion of the sale of the property.

Just to be clear, the above is based on personal experience and following the tailored advice of an accountant. Your circumstances may or may not be similar so please get advice or DYOR.

NOVAMET21

gemma.zhang said:

If you split tenants in common 1:99. I know ppl who is doing it, so the low tax / no income one claims 99% on rental tax. 

Yes this is what I have heard people are doing.