Can I declare income tax on this trust deed?

inquisitive3000

My husband has a property which he receives rental income. To prevent having to pay higher income rate, he made a trust deed on the property to me as a beneficiary, so I can declare half the rental income so both of us pay standard tax rate. But the solicitor has made a trust deed written like this:
“In consideration of the foregoing the Trustee declares that from the date of this deed he will hold the Property and the net proceeds of sale and net income until sale upon trust for sale for himself and the Beneficiary as joint tenants.”
It looks like I am only entitled to the Capital AFTER the sale, not the rental income. Also, on the sale of the property, I cannot declare Capital Gain Tax to claim my share of Annual Exemption Amount, so we loose 2 time of £9200 (if this year) tax relief.
Does anyone can advise if this is the suitable deed? Do we need to change it? I called the Inland Revenue Tax helpline, but they said I have to speak to accountant of a financial adviser, but I don’t have one.

CLAPTON

It seems to me you are now joint tenants.

inquisitive3000

CLAPTON wrote: »

It seems to me you are now joint tenants.

Yes, true, but how about the tax positions? Thanks.

CLAPTON

as joint tenants you are each allocated half the rent (and taxed accordingly) and when you sell you have two CGT allowances

inquisitive3000

The joint tenant only applies to when one of us dies, the other half would automatically go to the one who is alive, I thought?
I actually have an appointment to see a tax officer at a local tax office. But I wonder if they know. When I was on the phone, the lady told me to speak to a financial adviser, because the Inland Revenue was not in a position to explain the trust we made, but she said that from what I read to her on the Trust, I could not be assessed on half the rental income because I was not officially the owner. When I asked her to make an appointment for me at my local tax office, she said they wouldn’t know as well. But I insisted I wanted to see an officer. Why they don’t know themselves?
My solicitor confirmed that my husband did not need me to sign to sell the property, so I think I do not have the control of the property so cannot declare income tax on it? Maybe the lady on the phone was correct?

CLAPTON

you need to speak to your solicitor again and ask these specific questions.


if you're concerned why not transfer half the property to you by changing the deeds ?