Unmarried couple sharing rental income

Can an unmarried couple split rents from properties only owned in one name

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Scenario is an unmarried couple with a rental portfolio. Properties are all in his name, but they want to have a partnership so income is split 50/50. Given the anti avoidance rules on splitting rental income is this possible? I have read lots of differing views on this.

Replies (11)

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By Accountant A
23rd Apr 2019 12:46

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Replying to Accountant A:
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By alisonis
23rd Apr 2019 12:56

OK didn't appreciate that, nothing sensitive included.

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Stepurhan
By stepurhan
23rd Apr 2019 13:45

Please share the differing views you have read, because this is often shorthand for "I want to pretend I have done research when I haven't"

At present the couple does not have a rental portfolio. Only one of the members of the couple has a rental portfolio. If they want to split the income, then some of the rights would have to be transferred to the other partner. As they are likely to be connected parties, but they are not married, any such transfer is likely to create other tax issues.

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By alan.rolfe
23rd Apr 2019 14:12

Is there any reason they cannot get married?

Marriage can be very helpful for tax planning and would be the first option to explore.

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Replying to alan.rolfe:
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By alisonis
24th Apr 2019 09:28

I agree, and have suggested that!

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RLI
By lionofludesch
23rd Apr 2019 17:49

Short answer is no.

But they can always visit a solicitor and alter the ownership of the asset.

Obviously, if that happens, there are suddenly other issues beyond saving a few quid in tax.

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By JCresswellTax
24th Apr 2019 09:52

They could always look at transferring a small percentage of each property to his mrs, the overall value of which will be below the CGT annual exemption.

As they aren't married, they can then have an agreement to split the property profits in whichever ratio they see fit.

Not sure of the SDLT implications off the top of my head.

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Replying to JCresswellTax:
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By alisonis
24th Apr 2019 10:03

Good idea, if it is a gift and no money exchanges hands then I would have thought no SDLT arises..

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By Vile Nortin Naipaan
24th Apr 2019 12:50

I imagine that there's a deed of thrust in a dusty drawer somewhere.

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Replying to Vile Nortin Naipaan:
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By Tax Dragon
24th Apr 2019 13:36

Vile Nortin Naipaan wrote:

I imagine that there's a deed of thrust in a dusty drawer somewhere.

A comment to tickle the cockles of any budding Sigmund Freud.

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By Montrose
24th Apr 2019 13:31

HMRC don't accept that joint ownership creates a partnership -see https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1030.
One possibility is for a company[ownership/directors as thought appropriate] to rent the property, and for the company then to sublet. Costs are likely to exceed any benefit.

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