How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TaxRobin Your Own Question

TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15046
Experience:  International tax
14155347
Type Your Tax Question Here...
TaxRobin is online now

My wife and daughter bought a property 4 years ago along with a friend and his daugh

Resolved Question:

Hi
My wife and daughter bought a property 4 years ago along with a friend and his daughter (thus 4 persons owning it jointly on the land registry) so that the children can stay in it while studying at university. The mortgage is paid by my wife and the friend (since the children have no significant income). Last year my daughter moved out of the property and so my wife and daughter rented out their part of the property. The rental income goes into my wife's account as she is paying the mortgage.
My daughter has just a few hundred pounds income (per year) and so is not a tax payer. My wife is a tax payer and she files tax returns.
How should my wife account for this rental income ? Should she only account for her portion or my daughter's as well (note that my daughter is not paying the mortgage) ?
Thanks for your reply.
Submitted: 1 year ago.
Category: Tax
Expert:  TaxRobin replied 1 year ago.
HelloWhere property is owned jointly with one or more other persons the way the rental income is taxed depends on whether the letting is carried on in partnership.Where there is no partnership (as in the case of your wife and daughter), the share of any profit or loss arising from jointly owned property will normally be the same as the share owned in the property being let. But joint owners can agree a different division of profits and losses and so occasionally the share of the profits or losses will be different from the share in the property. The share for tax purposes must be the same as the share actually agreed.Your wife could claim all if she and your daughter agree especially if your wife is receiving all the rental income.
Customer: replied 1 year ago.
Thanks for the reply. My wife and daughter have equal ownership and they have no plans to change that. Do the tax rules have any bearing on who pays the mortgage and who receives the income (when it comes to filling the returns) ? My wife is receiving the full rent for ease of management and paying out the expenses and also since she has been paying the mortgage.
Expert:  TaxRobin replied 1 year ago.
Then your wife should claim the rental in total.The ownership would not change just because they decide your wife would claim all.A different division of profits and losses and the share of the profits or losses will be different from the share in the property.Only the interest part of the mortgage payment can be treated as an expense when working out your wife's rental profit or loss for tax purposes.
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15046
Experience: International tax
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Just one final clarification. Ideally, my wife wouldn't not want to claim the full rental as this would mean she will have to pay more tax. What does she need to do it if she only wants to claim only her portion ? Also I assume property maintenance expenses are legitimate expenses when it comes to working out the tax.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions