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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a higher rate tax payer (pension and a job - aged 60)

Customer Question

I am a higher rate tax payer (pension and a job - aged 60) and am investing in a flat to let out (owned in joint names). I am wondering if the tax return for the flat, should be in my wife's name as she is a lower rate tax payer or mine?
Ian Pike
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. If the flat is in joint names with your wife, then the rental income will be split on a 50:50 basis unless it is actually owned in proportions other than 50:50 and you inform HMRC by completing a form 17. If your wife is a basic rate taxpayer, then she will pay less tax on her share of the rental income than you will on yours. If the property is put into her name alone, she will pay less tax if she remains a basic rate taxpayer. Assuming there is no mortgage, you won't have any problems with a lender if you want the property to be owned solely by your wife. I cannot tell you how you should apportion ownership but most people would take advantage of their spouse's lower tax rate unless there was a mortgage. However, higher rate tax relief for mortgage interest on loans to finance let property will be gradually reduced between April 2017 and April 2020 until it reaches 20% from 2020/21. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
Hi.I'm just following up to find out if my answer helped or if you have any further questions.