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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Rental profits Me and my husband brought a house to rent out.

Resolved Question:

Rental profits
Me and my husband brought a house to rent out. I am a 40% tax payer and my husband looks after the children and doesn't pay tax on the £4k a year he earns being a local councillor. To finance the house my husband put down his redundancy money as a deposit (circa £30k) and for ease (as I was mortgage fee on the house that I own which is now the marital house we reside in) I put a mortgage in place (circa £200k) against my house my name. My question is, can I put 50% of the rental income but claim 100% of the mortgage interest therefore paying little tax on the small profit I pay? Obviously very close to submitting my tax return so any guidance would be great.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank your for your questionThis is HMRC view - If you live together with your spouse or civil partner, we normally treat income from property held in your joint names as if it belonged to you in equal shares and tax each of you on half of the income, regardless of actual ownership.If you want to be taxed on your actual shares (known as `actual basis') you need to complete Form 17. You will also need to provide evidence that your beneficial interests in the property are unequal, for example a declaration or deed.You can complete the form herehttps://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/SpecPersTax_iForms/1.0/17&template=17.xdp You can't claim 100% of the mortgage interest and only put 50% of the rental income against it, I'm afraid.You have have wished for more favourable news .. sorry about that. I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
oh well worth a try. I thought it was worth the punt for £42. The problem is the fact that in reality we split the income but I get left with the mortgage against the house, I guess as we are 'married' its all our money at the end of the day. Just frustrating that I end up paying so much tax when only one of us works. If I split it accordingly I would probably end up owning 75% of the house which would actually be worse and cant really just put it in his name as we will need both our capital gains allowance when we go to sell it. Very annoying. If there is any other ideas that would be great, if not thanks for your help and I will rate it.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.I wish I could suggest something more favourable.HMRC have set rules for married couples living together. I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4881
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
thank you anyway for the advice
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes.

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