Armen

I am looking to assign 60% of the rental income from a single property to my wife as beneficial holder. As it stands, the property has a mortgage under my name alone. However, my wife and I split the cost of the mortgage by way of paying equal amounts into a joint account out of which the payment to the lender is made on a monthly basis by direct debit. Would my spouse by able to claim the cost of finance relief against her share of the rental income simply by evidencing her contribution to our joint account? Or will HMRC only recognise her right to finance relief if she were named in the mortgage itself? In the latter case it would be evidenced by Tenancy in Common mortgage arrangement to account for the uneven split of 60/40.

Hi HMRC Admin 17, Thank you for your reply. Regarding the matter of my wife benefiting from any Finance Cost relief if I were to transfer beneficial ownership over to her: When you mention that this can be covered under a deed of trust arrangement, is the implication that outside of deed of trust arrangement, HMRC would not recognize my spouse’s claim to finance cost relief in relation to her contribution to the residential mortgage under my sole name? As a reminder, she currently contributes 50% to the mortgage through a joint bank account. In other words, is it insufficient for HMRC to allow my spouse to claim a Finance Cost relief (of 20%) against any beneficial ownership she maintains solely based on evidence of payout from a joint account with equal contributions? Is the only way to incorporate the Finance Cost as part of the deed of trust arrangement? Thank you.

Hi, I have a similar situation to those above; however, I simply want to be certain I fully understand what’s possible and what’s not. Situation: • I have a property and a mortgage under my name. • Having recently married, I would like to transfer 50% of the rental income to my spouse. I understand I can do this through a Deed of Assignment, thereby assigning her a 50% Beneficial Interest. • The mortgage is paid out of a joint account, meaning she effectively contributes to 50% of the mortgage payments. My question: • Can my wife benefit from the 20% Cost of Finance reduction to her tax for her contribution to the mortgage via of our joint account, even though the mortgage is currently under my name alone? She is after all incurring the expense as evidenced by our equal contribution to the joint account from which the mortgage payments are paid out of. Thank you for your time.