UK Landlord Forum / Life

Hi

Me and my partner are buying our first buy to let, and I've got a question regarding joint or part share ownership in regards to tax.

I currently work full time and my partner does not she looks after our two year old and is pregnant with our next child.

I usually hit the 40% mark by the end of the financial year in my full time job.

So I'm assuming from what I've read that the future property rental income will be taxed 50:50. Half against my tax income and the other half against my partners.

Whilst filling out forms for the solicitor i noticed that you can alter the share of who owns the property.

Would this share be reflected on the taxable income when paying tax?

Many thanks

Yes you can

A.
1. Purchase the property in unequal shares (as tenants in common).
2. You can then complete HMRC Form 17
3. Your income won’t be taxed according to your proprietary interest (share) of the property until the HMRC receive that form (within 60 days).

Or
B.
1. purchase the property 50:50 as “tenants in common” but then
2. make a Declaration of Interest specifying your beneficial interest in the property (99:1)
3. Submit the Form 17 and the Declaration of Interest Trust to HMRC (same time rule applies).

Which means that whilst you ‘own’ the property in equal shares you are entitled to the benefit of the property (income) in the share you declare (99:1).

My preference is option B which is more flexible as you can change the split by declaration of trust at a later date.

If you knew what you would be doing and with respect I suspect you do not (hence you posted the question) you can download submit a form to the land registry to convert to Tenants in Common, to the HMRC the Form 17 and a Trust template from .gov.  It’s all quite simple. 
What I suggest though is get your solicitor to do all this for you this time but take note of what she/he does so you can do it yourself next time.

(I have assumed you meet the requirements for Civil Partner as defined by HMRC as you are not married).