A light property income tax question!
- Person A and Person B own a property 50/50 via a tenant in common arrangement
- Person A and Person B are not related or partners in any way
- Mortgage is in both Person A and Person B's name
- Service charge / ground rent payable
- Person A lives in property alone as their primary residence
- Person B lives in another property
If Person A is looking to pay 100% of the mortgage for a year, how is this treated on Person B's tax return? There is no rental income as such, but Person B is benefitting in the long term because Person A's contribution is paying off a mortgage on a property Person A has 50% ownership of.
Does Person A's contribution for half the mortgage need to be carved out so that Person B pays income tax on this? Or can 100% of the profit/loss be attributed to Person A so that no profit is made and no income tax is payable (as no rent is being received from outside Person A and Person B)?