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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13863
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Sam HMRC Enquiry I have to live in accomodation provided

Resolved Question:

Sam
HMRC Enquiry

I have to live in accomodation provided by my employer. We've rented out our family for the last five years. My wife doesn't work could she become the Landlord and receive the rental income? The house is in my name would this make any difference?
Many thanks
Duncan
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi Duncan

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

I am afraid the answer is no, as the property is in your sole name, then it has to be treated as your income. Is there any chance that the property (or at least a half share) could be put into your wife's name?

Please advise

Thanks

Sam
Customer: replied 3 years ago.


Sam


If I put the house in my wife's name won't I have to pay death duty on the house or at very least wouldn't she have to pay capital gains tax on the property?


Duncan

Expert:  Sam replied 3 years ago.
Hi Duncan

Thanks for your response

There is no death duty and as far as Inheritance tax is concerned (which is maybe what you meant) then anything left to either spouse does not get counted in the Inheritance tax position, its only elements of the estate left to others, and if this is less than £325,000 then there is no Inheritance tax.

There is also no capital gains at transfer as spousal transfers doe not get treated as a taxable disposal.

It will only be when the property is sold that a capital gain will be consideration, and as the transfer would be taking place when this is not your main residence, then reliefs for the private residence relief, for when you lived there and for the period of time that you were in job related accommodation would be lost, and whilst you could transfer the property back, the tax year prior to any future sale, you too would have had that period of time that the property was not in your name, on which capital gains will still arise.

But I afraid that is the only way that rental income could be considered to be your wifes.
Maybe its worth calculating the difference to compare what is more beneficial long term, both with the full transfer and then with a half transfer - and of course as things stand using the savings made with rental income v the capital gain charge position.
But of course without knowing how long you plan to retain the property - and whether you will return to it prior to sale, there are so many variables.

Thanks

Sam

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