Jason King
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RE: Income from Jointly owned property PIM1030 Bare Trust
Thank you HMRC Admin 17, so in this instance, as the income is rent it is the person or 'trust' receiving the income that is liable for tax. This would indicate that this would not be a settlement and the rent could indeed be paid into a 'trust' where a declaration of trust is written up indicating the 'trust' is a beneficial owner and is entitled to a percentage of the rental profits. -
RE: Income from Jointly owned property PIM1030 Bare Trust
Thanks BellaBoo, Having now read up on Settlements you are correct, this would be classed as a settlement so would not work to the benefit of anyone, it is probably time to speak to a financial advisor. Thanks Again.. -
RE: Income from Jointly owned property PIM1030 Bare Trust
Hi HMRC Admin 20, Thank you very much for coming back to me. Just to clarify, a Declaration of Trust can be written up having my sons Bare Trust as the beneficial owner of 50% of the profit on the property rental income and my mum (my sons Grandmother) as beneficial owner of the other 50%. Each party would then pay income tax if any is applicable on their share of the income. This would be the case even if I (the Dad) have a share of the legal ownership, I would have no tax obligation in respect of the rental income as I do not receive any. -
Income from Jointly owned property PIM1030 Bare Trust
We own a rental property that has been in the family for a few generations, the property is currently owned in un-equal shares by my Mum, myself and my son in the form of a 'bare trust', my son is under 18 and his share of 5% was gifted to him by his Grandmother. All the profit currently goes to my Mum but she would like a 50% share of the profit to be paid into my son's 'bare trust' to help fund his school fees. Can his Bare Trust receive 50% of the profit if his share of ownership is only 5%, would the beneficiary (my son) then be liable for tax paid on his share of the income?