Deed of Trust - Implications on Returns

I am looking at creating a deed of trust whereby the property rental income will go to my parents 50-50. Once this has been set up can you advise:- a) That any rental property expenses such as repairs, maintenance, insurance (there is no mortgage) will also be allocated to my parents and reflected on their returns, or will these expenses have to be recorded on my return with losses carried forward indefinitely? b) If there will be no property income/expenses for me to report - will there be a need for me to complete the property section ? c) Will I need to complete a self assessment form if my only income will be earned income from my employer.

Hi,

As it is a 50/50 split between your parents, we would expect the income and any expenses incurred by them to be split equally.

If you are not receiving any rental income, there is nothing to report to us. You can see whether you meet the criteria to complete a Self Assessment tax return here:

Who must send a tax return

Thank you.

Thank you. Once the Deed of Trust has been set up so that the beneficial owners of the property are my parents with a 50-50 split, how do I notify HMRC of this deed of trust as have been told to complete and submit Form 17, Is this correct or do I need to do something else ?

Hi,
 

Thank you for your question. In this instance, the Form 17 would not apply as although you have transferred the beneficial ownership to the rental income, the Form 17 would only apply for unequal shares in the property, i.e. 49/51% split, 100/0% split and is designed for spouses which in this case would not be appropriate. I would advise that if you receive no rental income then on your part, no further action is required. For your parents, I would suggest they send a copy of the deed of trust to HMRC, Self Assessment, BX9 1AS, United Kingdom , to update their records accordingly. Thanks