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    • Joy_mate
    • By Joy_mate 14th Mar 18, 5:31 PM
    • 82Posts
    • 15Thanks
    Investment in property. What to choose.
    • #1
    • 14th Mar 18, 5:31 PM
    Investment in property. What to choose. 14th Mar 18 at 5:31 PM
    Hi all. Thank you in advance.
    Me and my wife are thinking to buy a flat together for investment purpose. My wife will be contributing 80% and myself will be contributing 20% towards 25% deposit. My wife's income tax rate is 40% whereas my one still basic 20% tax rate.
    Now once we have income from rent, we must declare and pay the tax on it.
    But my concern is shall we go for tenants in common while purchasing this flat, so I can choose to have 90% income from rent and my wife has 10% only. In short I will pay only 20% on rent income. Is that possible, by this way we can save some tax on rent income. Anyone have done this before and please giv us Any pros and cons of this option.
    No chance of separation or divorce in future until we die.
    1. If we'd go for joint tenants then,
    For eg: rent income after all th decdutction is 1000, we both can have 500 each and hence my wife will pay 200 in tax , where as I will pay only 100. In total we pay 300
    2. If we go for tenants in common then,
    For eg: rent income after all the deduction is 1000, from this 1000 I will keep 900 (as a 90% shareholder) and my wife will get 100 (as a 10% shareholder). So our tax will be 180 and 40 respectively. In total we pay 220
    Please advise me if I m having wrong calculation / perception above.
    Thank you again.
Page 1
    • capital0ne
    • By capital0ne 14th Mar 18, 6:40 PM
    • 474 Posts
    • 236 Thanks
    • #2
    • 14th Mar 18, 6:40 PM
    • #2
    • 14th Mar 18, 6:40 PM
    Why not invest in a REIT within an ISA each, that would take care of 80k in the next few weks, all tax free and no hassles or tax returns.

    Maybe you've already maxed out your ISAs and pensions in which case go for it and all the hassle, grief and losses you can manage. Good luck, report back on how it goes.
    • Malthusian
    • By Malthusian 16th Mar 18, 12:18 PM
    • 4,072 Posts
    • 6,381 Thanks
    • #3
    • 16th Mar 18, 12:18 PM
    • #3
    • 16th Mar 18, 12:18 PM
    It is certainly possible to have unequal shares as tenants in common. Wouldn't it be simpler however to just hold it in your own name?
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