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  • Working from home tax relief (covid) after ceasing employment

    My husband ceased employment on 30 June 2021. He met the eligibility criteria to claim the £6/week working from home covid tax allowance as he had to work from home due to covid and had increased home expenses. Can he therefore claim for the FULL 2021-22 tax year? Or because he ceased employment mid way through the tax year, can he only only claim for the 12 weeks up to the date he ceased employment? I have read you only had to have worked from home at some point during the tax year but can’t find any guidance about whether you also had to have been employed for the whole tax year. Thanks
  • Trading allowance/choice of business structure

    My spouse and I have recently set up a small business together. Total gross income for the 21/22 tax year will be less than £2,000 (i.e. less than £1,000 each) as we have not traded for a full year. We expect total gross income for the 22/23 tax year to be more than £2,000 (i.e. more than £1,000 each). Would the following be acceptable: 21/22 tax year - we both use our trading allowance tax exemption of £1,000 and so neither of us needs to report the income to HMRC nor register as self employed 22/23 tax year - we register a partnership with HMRC and report our share of income and actual expenses accordingly (trading allowance cannot be claimed against partnership income). A further question. Instead of registering as a partnership in 22/23, can we instead choose to register individually as sole traders in 22/23 and report the income according to the work done by each of us? We can then both claim the £1,000 trading allowance (as this is more beneficial to us than claiming actual expenses). Or, because we work together in our business, would we have to register as a partnership (and therefore be unable to claim the trading allowance as it does not apply to partnership income)? Ultimately, can we choose the business structure (2 sole traders or 1 partnership) which is most tax efficient for our own personal circumstances, or because we work together in our business are we required to choose the partnership structure?
  • RE: Self employment or partnership?

    Thanks again Admin 17. So if it is advantageous from a personal tax point of view, i.e. as sole traders we can both claim the trading allowance, we can both choose to register as sole traders and split the income according to the work done by each of us?
  • RE: Self employment or partnership?

    Thanks for your reply. I’m trying to understand whether there is a choice between each becoming sole traders or alternatively setting up a partnership. Or do the circumstances dictate this? I understand a partnership cannot claim the £1000 trading allowance whereas a sole trader can. So we would choose to each become sole traders if HMRC would accept this.
  • Self employment or partnership?

    My spouse and I have recently started a dog walking business. We advertise through an app as a couple. Sometimes we walk a dog together, sometimes only one of us goes on a walk.Total gross income (before expenses) for 2021/22 will be approx £1,500. Can we both register as self employed and declare the income each one of us generates, and we can therefore both claim the trading allowance? Or do we have to register as a partnership?
  • RE: Transfer of beneficial interest to spouse. Query re rental expenses and mortgage interest

    Thanks HMRC Admin 25. The mortgage on the rental property is paid from our joint bank account because our income is paid into that account . We don’t have separate current accounts. Is that going to be a problem? I’m not sure how we would, in reality, demonstrate we have paid half of the mortgage each because we share our finances. Please can you advise? Thanks
  • RE: Transfer of beneficial interest to spouse. Query re rental expenses and mortgage interest

    Thank you HMRC Admin 10. Your reply to my second post says that " If you have transferred 50% of the beneficial interest to your spouse, you can each claim a 50/50 split of allowable expenses and tax credit for mortgage interest against your share of the rental income." Please can you confirm that this is the case even though the mortgage on the property is to remain in MY NAME only? I am just trying to make sure this advice does not conflict with the conversation I had with the SDLT helpline where I was told that if the mortgage remained in my name and I gift the 50% beneficial interest to my spouse, then there would no SDLT liability as there would be no consideration paid to me by my spouse. I am worried that if the mortgage stays in my name only then on the one hand there is no SDLT liability but on the other hand my spouse can benefit from a tax credit on 50% (his beneficial share) of the mortgage interest. Thank you
  • RE: Transfer of beneficial interest to spouse. Query re rental expenses and mortgage interest

    Thank you for your reply HMRC Admin 10. Are you able to point me towards the relevant HMRC manual that confirms this so I have it for my records? Also, are you able to advise on how such a transfer of beneficial interest is affected by Settlement legislation?Am I correct in saying that as long as the transfer of the beneficial interest to my spouse is (1) an outright gift, and (2) the transfer constitutes both a right to the rental income from the property as well as a share in the capital, then HMRC will accept my spouse declaring their share of the rental income on their tax return, and when the property is eventually sold HMRC will accept my spouse declaring their share of the capital gain?
  • RE: Transfer of beneficial interest to spouse. Query re rental expenses and mortgage interest

    Thank you for your reply HMRC Admin 2. I was aware that a form 17 was not applicable in my circumstances (as my spouse and I do not legally jointly own the property). Are you able to answer my questions about offsetting the rental expenses and mortgage interest tax credit? All of the research I have done only seems to consider the rental income. Once I have transferred a 50% beneficial interest to my spouse can we split all of the rental expenses 50/50 and also both claim a tax credit on 50% of the mortgage interest? Many thanks
  • Transfer of beneficial interest to spouse. Query re rental expenses and mortgage interest

    I am the legal owner of a buy to let property. The mortgage is in my name. I am planning on using a deed of assignment to transfer a 50% beneficial interest in the property to my spouse. I will remain the legal owner and the mortgage will stay in my name. I understand my spouse will then be able to include 50% of the rental income on their self assessment tax return. The rental expenses will be paid from our joint account and so I assume we can both deduct 50% of them from our share of the rental income. Is this correct? What about the mortgage interest? The mortgage will stay in my name so do I claim a tax credit on 100% of the mortgage interest and my spouse cannot claim any tax credit? Or will we both be able to claim the tax credit based on the beneficial interest split, i.e. we can both claim a tax credit of 50% of the mortgage interest? Many thanks