Renting House I Own, but Rent Paid to Wife

Scr00ge

I have been renting my house out (the title to the house is in my name), but I have been getting the estate agent to pay the rental income into my wife's bank account. I am not filling in the self-assessment tax returns. Does anyone know whether it should be me or my wife claiming the rental income for tax purposes?

Thanks.

david29dpo

How long has this been going on for? Is it your first tax year?

Debt_Free_Chick

I think it will be very difficult to persuade the taxman that the income belongs to your wife, whilst the asset (property) generating that income belongs to you, alone.

Compare it with money in the bank. You own the money; you get paid interest .... but you tell the taxman that the interest belongs to your wife ...... ?

Smi1er

Debt_Free_Chick wrote: »

I think it will be very difficult to persuade the taxman that the income belongs to your wife, whilst the asset (property) generating that income belongs to you, alone.

Compare it with money in the bank. You own the money; you get paid interest .... but you tell the taxman that the interest belongs to your wife ...... ?

This is the exact reason that I gifted to my Wife my property that I let out.

The property wasn't directly mortgaged so it was a case of filling in some land registry forms and paying a fee of £50.

Has your Wife been completing tax return forms?

Uncle_Rico

Pay your taxes like the rest of us have to!:mad:

Gorgeous_George

I think it can be done and this link (clicky) seems to confirm that but, as always, it is worth getting proper legal advice.

GG

Gorgeous_George

Uncle_Rico wrote: »

Pay your taxes like the rest of us have to!:mad:

That's really helpful - well worth posting.



GG

TTMCMschine

My accountant always says that theres nothing wrong with avoiding tax as long as you stay within the rules that the taxman has set - ie, use the rules to your own best benefit.

However, she says that evading tax is a different ball game altogether. Once that you start playing games with the taxman & are obviously trying to avoid paying tax that is due by trying things like you're doing then he's going to slap you with a bigger tax bill & probably fines on top. He'll assess what he thinks you should have paid, plus fines of up to 100% of what he thinks you owe him, plus interest, and its up to you to prove you don't owe it, not up to him to prove that you do.

Just pay what you owe. Its easier & less painful.

Gorgeous_George

If in doubt, gift the house to your wife.

Remind me, what is the name of this website again? If you can reduce your tax bill LEGALLY then that is a good thing and very MSE.



GG

Generali

What GG says is correct. There's no stamp or CGT due on transfers between spouses. At the moment if you own the house, the rent is yours so tax will be payable on rent and any capital gain under your allowances and at your marginal rate AFAIK.

Gorgeous_George

From HMRC (clicky)...

Married couples and civil partners can, in certain circumstances, ask to be taxed on their actual entitlement to income from jointly held property. They do this by making what the law calls a `declaration'. This sets out their actual entitlement. They can only make a declaration jointly. If one spouse or civil partner does not want to make a declaration both must accept the standard 50:50 split for jointly held property.

GG