HMRC Admin 8 Response

Hi,
Legal and beneficial ownership can be separate entities for rental purposes.
It would be acceptable if the monies were paid into a joint bank account as HMRC will recognise the beneficial ownership split from a valid declaration of trust.
You are correct with regards to the mortgage interest. The person who holds the mortgage can only claim the interest portion as a residential finance cost.  
Stamp duty is not dealt with on this forum. You should call their helpline on 0300 200 3510.
I have attached a copy of the stamp duty manual below, this  may answer your question without calling their helpline.
HMRC cannot comment on remortgaging. You will need to obtain legal advice on that matter.
Links below to your questions should help:
TSEM9800
Stamp Duty Land Tax Manual
Thankyou.

Hi,
You may need to complete a self assessment tax return to report this income. However if you were renting a room out in your home you may qualify for rent a room relief which is an allowance up to £7500.
We have attached some general guidance on self assessment and rent a room relief:
PIM4001
HS223
Thankyou.

Hi,
The costs of bringing the property back up to standard are allowable if they were incurred 'wholly and exclusively' for the property business: PIM2120.
Thankyou.

Hi,
As you are the sole owner of the property, and from the information provided within your query, you are looking to transfer 50% of the rental income beneficial interest to your Wife.
If this is the case, we would advise that the Declaration of Trust would be appropriate as the Deed of Trust would include transferring legal title to wife, whereas the Declaration would only transfer beneficial ownership of income/expenses whilst retaining legal title.
As to where the rental income is sent to is not a matter for HMRC, only beneficial ownership and entitlement to that income.
As you are the sole payer of the mortgage, we would advise only yourself would be able to claim any mortgage interest payments.
As the sole owner of the property, the Form 17 would not be applicable as this only applies to properties held in joint names.
Thankyou.
 

Hi,
If you hold a joint bank account then HMRC would expect to see the interest amount split in a 50/50 share based on the level of interest received. Firstly, I would advise to look at HS300 as this covers non-residents and investment income which may give more in-dept information to your situation.
You may include service charge as a deductible expense if they have been incurred wholly and exclusively for the rental property, found at:
PIM2010  under Box 27 “Legal, Management and other professional fees”.
As mortgage interest is dealt with differently to other expenses, when the interest figure is declared, you will receive relief as a basic rate reduction in Box 44.
Further guidance is attached here:
Restricting finance cost relief for individual landlords
Thankyou.

Hi,
In relation to whether a SEV Form/ restriction to change to tenants in common, as transfer of deed is not taking place, we would expect that this would not be necessary but we would advise to contact the Land Registry direct as this forum is based on income from property queries.
As the property is held in joint names and you wish to declare uneven interests, the Form 17 would be the appropriate form to complete alongside the declaration of trust/ deed of trust.
Thankyou.

Hi,
Yes, you are correct that a declaration of trust may be created to transfer beneficial interest in the properties to your wife within a 60 day period of the declaration being signed.
Thankyou.

Hi,
Although the rental income figure does not exceed the £7,500 exemption, you would still be required to report the income amount, to which when specifying you qualify under Rent-A-Room relief, you would tick the box stating your income does not exceed the £7,500 exemption.
Thankyou.

Hi,
Yes you are correct, your wife would declare her share of the rental income through their individual self-assessment tax return, not from the trust. Although no income was received through the Trust, we would advise to submit the self-assessment tax return for the trust account in addition.
Thankyou.

Hi,
Yes that is correct based on the date the deed of assignment is signed.
HMRC would expect to see both the rental income and any expenses incurred reflected based on the percentage split shown in the deed.
We can confirm that although you do not need to send a copy of the deed of assignment,  we would advise to keep hold of a copy as HMRC may request sight of this in the future.
Thankyou.