Do i have to pay Tax on rental income?

MarkyMarkD

It is quite common for the landlord to be the lower income partner.  Something that the better accountants advise their clients.  Much the same as putting investment income into the name of the lower income partner and viewed the same by the Revenue.

For goodness' sake, Plumpud. It is not "much the same". You can't "put investment income into the name of the lower income partner". You can TRANSFER ASSETS into the name of the lower income partner, so that the income IS that of the lower income partner.

You can do EXACTLY the same with property.

There is no similar case where you can just "pretend" income belongs to your partner. It belongs to who owns the asset and they are the person liable for tax on that income.

The better accountants advise their clients to transfer assets into their non-tax-paying spouse's name. I do it myself. But that's legitimate as transfers between spouses don't attract any form of taxation.

I've never seen any "better accountant" advising pretending that the lower income partner owns assets they don't, or that they should rent out property they do not own. I'd love you to show me an example where they do. Conversely you can read (online or in the press) LOTS of competent accountants advising people to support their children in purchasing property in the children's names whilst they are students (for example) so that those students can legitimately declare the rental income as theirs and pay a restricted amount of tax on it, because of their limited income.

MarkyMarkD

If you own a property which is not your main residence, and transfer it to anyone other than your legal spouse, you will incur CGT on any gain you've made on it up to the date of transfer based on its fair market value (even if it's a gift).

If it is your main residence, it's exempt from CGT.

Once the asset belongs to your children, it's legimitate for them to earn the income on it - but any income received from funds given by a parent are taxed as if they are the parent's income, unless they fall under a de minimis value (of £100). So making such a transfer from parent to child isn't effective as a tax-planning device.

If grandparents or other relatives give the property to the children, that's OK. But not if they do so as part of an arrangement with the parents (i.e. if they are used as an intermediary, or they give a property and the parents give them something in exchange).