Jointly owned buy to let and tax avoidance

Jointly owned buy to let and tax avoidance

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What are your thoughts on the following?

I have a married couple, the H is a higher rate tax payer and W is basic rate. They would like to invest in a buy to let, funding it from their joint personal mortgage on their own home.

Can the buy to let be owned 10% : 90% rather than the default 50%:50%? Obviously 10% of the rental income would be reported on the H's tax return and 90% on the W's.

What are the logistics of setting up something like this? Would HMRC be suspicious and view this as tax avoidance? and would filling in form 17 make the couple more likely to be subject to enquiries? Has anyone out there done something similar?

Who can stop H can make a 40% gift to his W at NGNL? Is there SDLT implication?
Fitzwilliam

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David Winch
By David Winch
07th Apr 2009 16:02

Property owned in unequal shares

If property is to be owned in joint names but in unequal shares do advise the clients (in writing) to instruct a lawyer to deal with this.

There are relevant (non-tax) cases such as Stack v Dowden [2007] and White v White [2001] to be considered.

This will be particularly relevant in the case of the death of either party or their divorce. You do not want to be the adviser hung out to dry if it all ends in tears!

David

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