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taxation of property income

taxation of property income

I have come across a messy scenario as follows which I'm trying to get to the bottom of....UK client (that I've recently taken on, has rental property abroad (in addition to main residence in UK). It seems the mortgage is in client and hubby's name only (and I think so are on the deeds...but I need to check this), but there is also a separate "agreement" with 2 other people stating that they are part "owners". All looks a bit of a mess. Any comments as to who is liable to submit SA returns......the client and hubby (if they are the only ones on the deeds?) or all of them (if this separate "agreement/arrangement" applies)?

any comments gratefully received


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09th Apr 2012 11:53

Held in trust?

It sounds as if your client and her husband are holding the property on trust for (themselves and) the other 2 people.  Assuming that the beneficial interest in the property is equal shares, then if the property yields a profit, all 4 should be declaring 25% of the profit each.

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09th Apr 2012 11:59

what does the agreement say

are the 'other parties' entitled to a share of the income / losses or just the capital profits / losses , or is this not mentioned in the agreement - of course is the agreement legal -  i am not sure there is any indication that it is not so in the absence of any other info there appears to be a joint venture of some sorts so all may have to return and a partnership return completed

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