Tenants in common - rental income

A family owns a property as tenants in common. With parents owning 20%, son aged 15 owning 40% and daughter age 19 owning 40%. Parents manage the property and pay expenses. Question 1: Is it possible that daughter receives 100% of the rental profit (rent - expenses). Question 2: Can one of the parents declare the expenses on their self assessment or do expenses need to be declared by the daughter on her self assessment ?

Hi Darthwader,

The starting point is that whoever has beneficial ownership of the property has beneficial ownership of the income.
TSEM9160 - Ownership and income tax: legal background: ownership - income follows property.
For this not to apply there must be a seperation of income from property by way of valid declaration or deed of trust.
TSEM9170 - Ownership and income tax: legal background: ownership income follows property - variation.
However you should note that where the right to income has been transferred and the transfer is not on arms length terms the Settlements legislation may apply.
TSEM4200 - Settlements legislation: settlor retains an interest
An individual can only claim expenses if they themselves incur the expenses.
If the parents declared the expenses on their tax returns there would be no income for these to be set against as they can only be set against rental income. 

Thank you.

Thank you for your answer. In case the parents declare 20% of the income and and set the expenses against this income. The daughter (over 18 years) receives 40% of the income as she is owns 40% of the property. Can she also receive in addition the the 40% of the son (under 18 years)? Is it required to set up a declaration for this and what kind of declaration.

Hi,

You can find guidance here:

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

If the son wants to transfer to the daughter whilst retaining beneficial ownership in the property itself, then a valid deed assigning the income is required.

You can find guidance on how to do this here:

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

Thank you.