Husband and Wife Holiday letting profit split

Husband and Wife Holiday letting profit split

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A husband and wife own holiday lettings properties equally.

The Husband is a higher rate tax payer whilst the wife is only liable at basic rates.  As this is a holiday letting business, for which the wife carries out the majority of the activity, is it possible to allocate the profit more in favour of the wife?

I realise that with residential type lettings, this is inly possible with a change in beneficial ownership combined also with form 17 being filed with HMRC, however as the holiday lettings is a in this case very much a business activity is it possible for profits to be allocated in the most beneficial way, as is the case with other husband and wife business partnerships.

Many thanks

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By jamesbailey
20th Oct 2014 11:18

Profit split

You can split the profit in any way you like with no need for a change in ownership or a Form 17 - see ITA 2007, section 836 (3) Exception D

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By Steve Kesby
20th Oct 2014 11:31

One caveat

James is (quite naturally from the wording of the OP) assuming that your holiday lettings, all satisfy the definition of a furnished holiday letting and are in the EEA (including the UK).

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By stephenpotter
20th Oct 2014 11:33

Many thanks James and Steve.

That is as I had thought was probably the case but its great to get clarification.  The letting does satisfy the definition so I shall allocate the profits in the most tax advantageous way.

 

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