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

NOVAMET21

Bluebell1000 said:

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?

Thanks
The question I have is do I still need to fill in the tax return for 1% where my wife may own 99%?

Even though I'm in high tax bracket (gross), I contribute more towards pensions to get the adjusted income below 50k.

NOVAMET21

K_S said:

@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.

Thanks. This is helpful.
Yes I also heard that we can get around the CGT implications by changing the split to 50 50.

Can my wife claim 100% rental income or does it have to be 99% and I have to at least own 1%?

K_S

NOVAMET21 said:

Bluebell1000 said:

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?

Thanks
The question I have is do I still need to fill in the tax return for 1% where my wife may own 99%?

Even though I'm in high tax bracket (gross), I contribute more towards pensions to get the adjusted income below 50k.

@novamet21 If your 1% share of the gross rental income is under £1,000 and you don't have any other property income, it may count as your annual £1,000 property income allowance in which case you may not need to declare it to HMRC 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

canaldumidi

NOVAMET21 said:

K_S said:

@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.

Can my wife claim 100% rental income or does it have to be 99% and I have to at least own 1%?

For your wife to claim 100% rental income she'd need to own the property 100%. So back to my first response:

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

But if you want joint ownership, albeit as Tenants In Common with a variable % split, then you have to part-own.

NOVAMET21

K_S said:

NOVAMET21 said:

Bluebell1000 said:

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?

Thanks
The question I have is do I still need to fill in the tax return for 1% where my wife may own 99%?

Even though I'm in high tax bracket (gross), I contribute more towards pensions to get the adjusted income below 50k.

@novamet21 If your 1% share of the gross rental income is under £1,000 and you don't have any other property income, it may count as your annual £1,000 property income allowance in which case you may not need to declare it to HMRC 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

Thanks K S

Wasn't aware of 1 k income allowance. 

The other question I had was will the gross rental income or gross rental income minus the expenses count towards the tax allowance?

NOVAMET21

canaldumidi said:

NOVAMET21 said:

K_S said:

@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.

Can my wife claim 100% rental income or does it have to be 99% and I have to at least own 1%?

For your wife to claim 100% rental income she'd need to own the property 100%. So back to my first response:

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

But if you want joint ownership, albeit as Tenants In Common with a variable % split, then you have to part-own.

Thanks
I think K S made a very good point of 1k income allowance which means we can do 1.99 split and only my wife have to fill in tax return as the gross rental income will be less than 1k a year for 1% of gross rental income.