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TaxRobin
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Category: Tax
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Experience:  International tax
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My wife and I are in the process of divorcing. If she were

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My wife and I are in the process of divorcing. If she were to transfer her 50% share of our property to our daughter and I were to continue to live in said property would I have to pay rent to my daughter? If yes I assume she would be taxed on that income. If no would she be taxed on the notional receipt of that income?
I hope this is clear enough
Regards
Derek Wakeman
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
You would still own 50% of the property and you would not have to pay rent. She would not be taxed on the notional either.
Your ex could continue to live in home as their primary residence after giving it away, provided they pay a market rent to your daughter. Then your daughter may have to pay Income Tax on the rent paid her.
Expenses incurred by a taxpayer on a property occupied rent free by, for example, a relative are likely to be incurred for personal or philanthropic purposes - to provide that person with a home. Your daughter would not incur income on her half nor could she claim any expenses.
The mother is going to be under the 7 year rule for gifting.
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