Property in my name, can I split rental income with spouse

Hi My wife is a foreign national, with permanent leave to remain. She does not work, but has permission to work, a national insurance number. I have 2 rental properties which I bought using our savings, but I bought them under my name because she didn’t have her permanent leave to remain at the time of purchase. These properties are in my name, but the deposit came from our savings. In terms of tax - Can I split the rental income equally between us on our tax returns? Many thanks

Hi,
 

You can only split this profits for this if the propertyis held in joint names. As the rental is only in your name, the responsibility of declaring and paying tax falls with you.  Thank you.

Not sure the answer you got is quite correct. As she is your wife, she is entitled to receive income from your properties with your agreement in her capacity as, say, a manager of your holdings. That income would, in her case be treated as earned income and would attract income tax if she earned above the threshold. However, she probably would not be able to claim any of the expenses incurred in running the properties, that would have to come out of your side of the rental income but you should be able to treat her income as an expense to you and, therefore a deductable in your rental business. If you put her name on the title so that she also owned the properties you would both be liable for your share of the tax if chargeable but you would also both be able to claim a share of the expences to offset. It may be worth your while asking HMRC directly if you can employ your wife as her main job in that capacity.

I was under the impression that HMRC view is that if the property is brought when married in one spouse name then the rental income is split 50/50

Hi, 

Income from property held jointly by married couples and civil partners is treated as beneficially owned by the individuals in equal shares. Consequently you are taxable on the income 50/50.

This rule applies even if the individuals own the property in unequal shares. It can be disapplied only by a declaration on form 17.  Please see the following link:

Property held jointly by married couples or civil partners

Thank you. 

According to the thread "Rental Income on Residential Property", it's possible to keep sole ownership and transfer the right to rental income to a spouse via a valid declaration or deed of trust. Did I misunderstand something?

Thanks for reply, an accountant is advising that on his CPD course he was advised a very obscure law and not well known, that if the property is purchased in one spouses name only after marriage then the income is "automatically" split 50/50 - im aware of declarations of trust under TSEM6001 and TSEM9410 TSEM9520 yet these state that must /ideally be in writing - question would be then is it "automatically split 50/50"

Hi

Alx_kj,   Thank you for your question. You can nominate the percentage of rental income liable to each spouse using form 17 linked see below: Declare beneficial interests in joint property and income  . Thank you.

 

Hi
 

Ray Hale,   Thank you for your question. Please see the guidance below on the split of property between spouses: Capital Gains Manual . Thank you.

 

Hi, I have a similar case , the rental property is on joint name 50/50.I want to transfer the rental income to my wife. I know deed of trust is the option. Does that involve any stamp duty payment as well, any other form of complications i.e. mortgage lender might object. Thanks, Ashish

Hi sabooalex,

Unfortunatly we are unable to answer enquiries on stamp duty, morgages etc on this forum and can only advise on income received from the rental property.

Thank you.

So in this scenario, can a deed of trust be created between the husband and wife for the wife to be responsible for the rental income? I am trying to understand if a deed of trust is suitable for this particular scenario

Hi KG33,

If you are the legal owner and you wish your spouse to receive a split of the rental income you can prepare a deed of trust to arrange this.

Thank you.

Hi, I am purchasing a second home jointly with my wife and we have declaration of trust setup with unequal shares. Would I still need to inform hmrc with form 17 to indicate unequal share in the declaration of trust despite there won’t be any income? Just thinking what if we come to send it with capital gain tax, so do it need to submit form17 now? Thanks

Hi Cyrus Chan,

We are sorry but the previous answer was incorrect.

You only need to complete a Form 17 if you own the property in unequal shares, you're entitled to the income arising in proportion to those shares and you want to be taxed on that basis. If there is no income received then you do not need to complete a Form 17.

Thank you.

Hi HMRC Admin 20 (Posted 9 days ago by HMRC Admin 20 Hi KG33, If you are the legal owner and you wish your spouse to receive a split of the rental income you can prepare a deed of trust to arrange this. Thank you.) I have BTL property in my sole name ( legal title on my name ) can i split the rental income with my wife by preparing the deed of trust? if yes, the mortgage is also just in my name, can you advise me if i can split the mortgage interest as well? Thank you

Hi,
 

As per previous answers then a deed of trust submission is the correct way forwards. If you wish to split the rental income 50/50 please include in the deed. You can also split the mortgage interest. Your expenses will be split accordingly as well.

Thank you.

Thank you HMRC Admin 17 Can you explain me when you said deed of trust submission, do I have to submit it to HMRC? ALSO mortgage interest certificate is only on my name ca I still split the interest with spouse using deed of trust?

Dear HMRC Team I have purchase a property solely on my name ( title is only on my name) but my friend invest half of the cost. I purchase through auction,and auction solicitor refuse to add my friends name on the contract as bidding registration was only on my name so I had to complete on my name. So I have created a deed of trust and me and my friend became beneficiaries to share 50/50 income. I have following questions Please 1) will this deed of trust be accepted by HMRC? 2) does this deed of trust needs to be stamped by Solicitors? 3) can it be witnessed by anyone? Kind Regrds 

Hi,
 

Thank you for your question. You can submit the Deed of Trust to HMRC and also split the mortgage interest in the same ratio as shown in the Deed of Trust.

Thank you.