I have a new client who together with her brother inherited their parents' home.
She 'bought' her brother's share with a loan which was taken out by her husband.
He was 'put on the deeds' as joint owner.
She received rental income since and because she has no other income and her husband does, wants to assign all the income to herself
Is this possible.?
And if so, what des she need to do in order to satisfy HMRC should they enquire?
Many thanks for your help , in advance
Replies (4)
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In the circumstances described the split must be 50/50 between husband and wife and no other ratio is permissable as things stand.
I agree
If they are married & living together then they will have a 50/50 problem re the income per the link below unless they have notified HMRC. http://www.markmclaughlin.co.uk/index.php/archives/822 However, there may be some arguments per the bottom of p181 in the link below: http://books.google.co.uk/books?id=QRa8gec09A0C&pg=PA181&lpg=PA181&dq=83... Alternatively, since it is axiomatic that tax law ignores nominees (unless expressly stated otherwise, like Sch 16 Para 3 FA 2003)), I think s836 ITA 2007 could be narrowly construed to mean as follows: 836 (1) This section applies if income arises from property [beneficially] held [jointly or as tenants in common] in the names of individuals [who legally jointly own it]…
With hindsight.Form 17
you make an election to split joint property other than 50:50. You need to do this within 60 days so you are too late. As they are married they are automatically taxed 50:50 if they hold property jointly. There are exceptions to this rule, this is tax, the devil in in the detail, so there may be more.
Hi
Legal ownership appears to an equal split between H & W.
They can execute a declaration of trust or similar, to give wife a greater beneficial interest.
As Nichola mentioned above, this should then be followed up by a Form 17, to advise HMRC of the varied beneficial interest. This does not have retrospective effect, though.