Tax on House Retal

Stringybob3

Hi, me and my wife currently have 4 rental properties. They are all mortgaged, with two in my name and two in hers. Therefore when it comes to our self-assessments I have always declared my two and she declares hers. Would I be able to change this and declare all 4 properties on my self-assessment. The reason being, we are both 40% tax payers, but I am paying the maximum into my SIPP so would therefore look to reclaim the 40% tax relief. She pays directly into her DB Teachers pension and therefore not eligible for tax relief. 

Dazed_and_C0nfused

Others will no doubt comment on the main query raised but you are completely wrong about this,

She pays directly into her DB Teachers pension and therefore not eligible for tax relief. 

Her contributions will be being paid under the net pay method so will benefit from a tax saving by reducing her taxable income. 

For example a teacher with salary of £40k contributing 10% will find their P60 only shows taxable income of £36k so they have avoided paying tax on the £4k net pay pension contribution.  And have more of their basic rate band available for any other taxable income.  Such as rental profits.

Stringybob3

Dazed_and_C0nfused said:

Others will no doubt comment on the main query raised but you are completely wrong about this,

She pays directly into her DB Teachers pension and therefore not eligible for tax relief. 

Her contributions will be being paid under the net pay method so will benefit from a tax saving by reducing her taxable income. 

For example a teacher with salary of £40k contributing 10% will find their P60 only shows taxable income of £36k so they have avoided paying tax on the £4k net pay pension contribution.  And have more of their basic rate band available for any other taxable income.  Such as rental profits.

Thanks for that. She already pays 40% tax on her teachers salary, so what I meant was that there is no way of her claiming any tax relief on the house income?

Keep_pedalling

She could always start a SIPP and pay rental income into that. 

Nearlyold

If these houses are owned as joint tenants/tenants in common and you're married you split the income 50:50 (this is the default position) if the properties are owned as tenants  in common you can opt to split the income in line with the % of each house you own.

If you don't own the house(s) as joint  tenants or tenants in common then whoever owns the house(s) has to include all the income from their house(s) in their own tax return you can't switch the income around.

sheramber

You would need to transfer ownership to yourself or joint ownership.

If joint ownership the income is automaticall y split 50/50 but you can then complete the necessary forms to elect the rental income on a different split.

Stringybob3

Thanks for the replies - much appreciated!