Assigning rental income to my husband

Apologies, I recognise this question may have been discussed previously but as a newbie to renting I am unsure as to where I stand. I own a flat solely in my name which I intend to rent out. As I am a higher rate tax payer can I assign the rental and service charge fees to my husband, who is a lower rate tax payer in order to reduce the tax bill? He would then collect the rent and pay the service charge. Would I need to inform HMRC or would he just complete the self assessment return?

Hi,

You can find guidance here:

TSEM9160 - Ownership and income tax: legal background: ownership - income follows property
TSEM9170 - Ownership and income tax: legal background: ownership income follows property - variation

You can retain ownership of the property whilst transferring the beneficial interest to your spouse. They will become entitled to their share of the rental income and will need to declare this to us. HMRC to not require sight of the declaration made but you should retain this if required in future.

You can find how to make a declaration here:

TSEM9520 - Ownership and income tax: express trusts - written declaration

Thank you.

Hi HMRC Admin 2, I have a follow-up question on this. In this case, if the property is under the wife's name, and there is a mortgage taken solely under the wife's name, if the beneficiary of rental income is the husband and he reports rental income through self assessment, can the mortgage interest be included as tax credit? Thank you.

Hi,

In the situation you have described, it would appear that the husband is running his property business from a property he doesn't own. In which case the cost of buying the property isn't an expense he incurs as part of his letting business and he would not be able to claim.

Thank you.