Have Tax Questions? Ask a Tax Expert for Answers ASAP
With regards XXXXX XXXXX properties which are rented out is there any issue with the gift with reservation rules? Ie that it could be deemed that I am still benefiting from the gift? At the moment we receive the rent into an account which is only in my name - would it help in this matter for example if the rent was paid into a joint account? Or shouId I ensure that my wife's half of the rent is paid into a separate account in her name?
We are both filing tax returns for 50% of the income. However, you may have overlooked that I am UK domiciles but my wife isn't. As I understand it in these circumstances, gifts are within the scope of UK taxation and GWR and PET does apply. If this is the case I guess I'm asking if it's likely if we are sharing the income and let's say it's going towards family expenses could HMRC take the view that I am benefiting from the gift to my wife. It occurs to me that this may require a legal opinion?
Yes, but the cap has been raised to 325K so unless the property is of very substantial value you will be out of the wood anyway and the GWR and PET rules irrelevant. By all means seek legal advice, but it won't come cheap and will have to be from a solicitor or barrister who has extensive practice in this field. Of course, these days you can go direct to a barrister.
By the way, you should be on the Non-Resident Landlord Scheme and your tenants or your letting agents should be deducting tax at 20% from the rentals and paying that direct to HMRC.
Yes our property is over 325K and given that average house prices in London are 362K according to Nationwide it's a little bit amiss to give advice making the assumption you did without qualifying that's what you did. As it is you have given incorrect information.
I have qualified for the NRL scheme and once you have done so there is no tax deduction necessary by the agent or tenant - that's the whole point of the scheme.