Jointly owned?

Jointly owned?

Didn't find your answer?

My client has let out his old PPR and the income needs putting on his tax return. 

The property is a flat and somehow my client (solely) owns the freehold, whilst his wife and he have the leasehold.  I'm imagining that the income should be shared between both on their tax returns ( the mortgage is in joint names by the way)   but perhaps someone with a bit of legal knowledge could confirm this?

Thanks

Replies (4)

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By ccassociates
11th Jan 2012 11:31

Jointly Owned

Income should be apportioned according to ownership but I see you have a sticky one here with Joint ownership of the leasehold. Joint mortgage does not define ownwership. In the case of dispute HMRC would look to the land registry documents. If your concern is to avoid HR tax on the husband he could always gift 50% to his wife and have the Land Registry documents reflect this.

Thanks (1)
By mydoghasfleas
11th Jan 2012 11:52

Ownership and rent

If it follows normal ownership there is a lease granted from the freeholder (landlord) to the leaseholders (tenant).  There will be a consideration, ground rent, payable by the leaseholders. 

The tenants will have granted a sub lease to the occupier (sub-tenant).  The rent payable by the sub-tenant will be chargeable on the tenant.  The tenant will be charged to tax on the rent less the ground rent and the interest paid.  The landlord will be chargeable on the ground rent.

As above, check the ownership, the rest then falls into place.

 

 

Thanks (1)
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By anon2000
11th Jan 2012 11:52

Thanks

The property has now been sold, but yes husband is 50% taxpayer and wife 0%, so it does matter - I'm  just unsure I suppose as to what constitutes the 'ownership', whether it is the leasehold or freehold - I would have thought that it was the leasehold for as long as it is in place, is that not what the purchase price was for and hence why the mortgage was in joint names? I'm  just not sure..

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By anon2000
11th Jan 2012 11:54

Thanks again

Just read your post mydoghasfleas - yes I see what you mean - makes more sense now!

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