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    • ra88it
    • By ra88it 14th Mar 18, 2:42 PM
    • 2Posts
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    ra88it
    Taxing rental income - solely owned, jointly share
    • #1
    • 14th Mar 18, 2:42 PM
    Taxing rental income - solely owned, jointly share 14th Mar 18 at 2:42 PM
    Dear All,

    I'm hoping that someone will be able to help me out with some advice. A number of years ago, I bought a flat. I am the sole owner on the title deeds. I now rent the flat out. All of the income from the flat comes into mine and my husbands' joint bank account, and for a long time it's been our only income. It covers all of our shared expenses and liabilities, and also helped to repay a loan for our jointly owned house, where we now live. For income tax purposes, we've always treated the income as joint income, and split it between us for the purpose of self assessment. Is this right - or have I made a horrible mistake that could land me in big trouble with the tax man? We've also apportioned the income between us depending upon how much the other has earned in the year, to try to maximise our allowances. Might this be a problem for us? We've always assumed that this was permissible between spouses, and have never tried to do anything unlawful, but I'm worried now that we might've done this wrongly. Any thoughts/guidance would be hugely appreciated!
Page 1
    • AdrianC
    • By AdrianC 14th Mar 18, 4:02 PM
    • 17,358 Posts
    • 15,700 Thanks
    AdrianC
    • #2
    • 14th Mar 18, 4:02 PM
    • #2
    • 14th Mar 18, 4:02 PM
    You solely own the property? It's solely your income. It should be on your tax return alone.

    Whether that money gets paid into a joint account and you spend it between you is a separate question. But jiggling who "earns" what to minimise the tax bill is rather naughty... and, no, HMRC will not look kindly on it any more than if you tried to claim part of his salary was really yours to reduce the tax bill...
    • AlexMac
    • By AlexMac 14th Mar 18, 4:28 PM
    • 2,032 Posts
    • 1,786 Thanks
    AlexMac
    • #3
    • 14th Mar 18, 4:28 PM
    • #3
    • 14th Mar 18, 4:28 PM
    I've been a small landlord for 20 or more years (well- getting a bit bigger; in waist size that is) and never once has the taxmen/women ever asked for detail beyond the few lines of summary on the annual self-assessment, and certainly they never have even hinted at auditing or challenging my return. No surprise. It wouldn't be worth their time for the grand or two extra tax, even if I was fiddling (which I'm not). In fact I think my wife and I might have done exactly what you're doing for a few years til we got round to putting the BTL property into joint names; which is tax-free between spouses anyway.

    And I can't really see anyone grassing up Mr and Mrs ra88it, of Bunny mansions, Warren Street to the HMRC fraud hotline...?

    So don't panic
    • flashg67
    • By flashg67 14th Mar 18, 4:38 PM
    • 2,457 Posts
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    flashg67
    • #4
    • 14th Mar 18, 4:38 PM
    • #4
    • 14th Mar 18, 4:38 PM
    Sorry, AlexMac, just because some people do it, doesn't make it right. My OH & I are landlords, own the properties equally and split the the income & allowances between us, rather than trying to cheat the system. Do you tax/insure your car? I hear millions of people don't, but it's hardly fair on the honest majority?

    Ra88it - If the property is in your name only, the tax liability can't be shared, no other way to say it really.

    I get that you're unlikely to be caught, but to me, that's not the point.
    • G_M
    • By G_M 14th Mar 18, 4:42 PM
    • 44,049 Posts
    • 52,156 Thanks
    G_M
    • #5
    • 14th Mar 18, 4:42 PM
    • #5
    • 14th Mar 18, 4:42 PM
    Is the question:

    1) have I been doing this right?
    or
    2) will HMRC check/find out?

    Both questions have been answered!
    • xylophone
    • By xylophone 14th Mar 18, 5:15 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #6
    • 14th Mar 18, 5:15 PM
    • #6
    • 14th Mar 18, 5:15 PM
    I am the sole owner on the title deeds. I now rent the flat out. All of the income from the flat comes into mine and my husbands' joint bank account, and for a long time it's been our only income.
    We've also apportioned the income between us depending upon how much the other has earned in the year, to try to maximise our allowances.

    What you did was not correct - as sole owner of the property the income was yours and should have been declared as yours.

    Looking at the above, you may well have underpaid tax.

    As to whether HMRC will find out - who knows?

    There may be questions asked if/when the property is sold/at probate/ if an anomaly is noticed.....
    • ra88it
    • By ra88it 15th Mar 18, 12:47 PM
    • 2 Posts
    • 0 Thanks
    ra88it
    • #7
    • 15th Mar 18, 12:47 PM
    • #7
    • 15th Mar 18, 12:47 PM
    Thanks all for your responses - much appreciated. I think for peace of mind I'll contact HMRC and sort it out with them via a voluntary declaration. I'm going to speak to an accountant about it and try to get it straight, rather than making a right mess of it myself! Hopefully if I'm coming to HMRC, rather than them coming to me, they'll look more kindly on me...
    • 00ec25
    • By 00ec25 15th Mar 18, 6:32 PM
    • 6,367 Posts
    • 5,879 Thanks
    00ec25
    • #8
    • 15th Mar 18, 6:32 PM
    • #8
    • 15th Mar 18, 6:32 PM
    I think for peace of mind I'll contact HMRC and sort it out with them via a voluntary declaration.
    Originally posted by ra88it
    that would be wise

    ask them if they will still accept a declaration under the let property campaign, your accountant should know what that means... if not get a qualified accountant who does !

    https://www.gov.uk/government/publications/let-property-campaign-your-guide-to-making-a-disclosure/let-property-campaign-your-guide-to-making-a-disclosure
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