Rental income split for tax purposes?

Rental income split for tax purposes?

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My client has helped her mum buy a rental property but is taking no share of the income. I believe that she will be taxable on her share of the rental income. Am I right?

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By duncanedwards
07th Oct 2014 17:28

It depends what the exact arrangement is. If she has simply lent some money to her mother, there is no right to a share of the rental. If it's a joint purchase, there probably is rental profit to report.

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By King_Maker
07th Oct 2014 18:48

You need to find out the exact position - owner or lender.

Even if the former, the rental sharing need not reflect the capital sharing.

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By RG
07th Oct 2014 18:58

I believe owner...

I'm pretty sure this is the case, she didn't talk about this with me before she did this. And there is of course the CGT situation as well...

I'm speaking with her tomorrow and want to be fully armed understanding of the rules.

 

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David Winch
By David Winch
07th Oct 2014 19:04

Read

THIS

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By RG
07th Oct 2014 22:03

I had...

.. they're not husband and wife, and I may be missing something, but couldn't find the answer I wanted.

 

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David Winch
By David Winch
07th Oct 2014 22:59

Then you must have read this

Where there is no partnership, the share of any profit or loss arising from jointly owned property will normally be the same as the share owned in the property being let. But joint owners can agree a different division of profits and losses and so occasionally the share of the profits or losses will be different from the share in the property. The share for tax purposes must be the same as the share actually agreed.

 

You say your client's share of rental income is NIL - then so is her taxable income from the property.

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