UK Landlord Forum / Life

My mother has inherited a property from her brother which she will shortly be letting out. The property was badly in need of a full refurbishment from top to bottom, and has had a new bathroom, kitchen, central heating, and double glazing. I was involved with a lot of the work and because of this mother has said any rental income she will pass on to myself.
Can anyone offer advice on the tax situation and whether or not I would be liable for tax on this money received?     

You should be liable for tax on that money received. Or someone will, for sure. You will likely need to do a self-assessment tax return each year, if you do not already. It is income from property. Even if it goes to your mother and she passes it onto you, as some kind of gift, someone will have to pay tax on it... as it is income. If your mother is outside of the tax system then her passing on this income to you is kinda a bit like tax evasion if you think about it. With this lark the best approach, by far, is to be above-board in all dealings. So maybe the question becomes - who is liable for the tax for the income? Traditionally, it'd be the Landlord. You've got to be careful about looking like you're abusing the system.

Thanks for the reply Hippogriff , mother has taken on an accountant to deal with the self assessment form as she is 84 so father has LPA. Wouldn't any tax that is due be deducted before any money is passed over? There seem to be so many grey areas and we want to be doing everything above board and not be stung with a hefty tax bill.

Your Mother owns the property and so would be landlady and earn the Rent in her name.
She will pay tax on the net income after costs.

If your services are paid for by her then those costs will include your labour charges.
So she would not pay tax on that portion of income.

However you will then have earned that income and so you will pay tax instead.

Note any accountant worth his salt should be able to advise you both of the most tax effective way of passing money to you. e.g. Rather than all income she could simply gift you some money which is tax free if below the threshold.
Your marginal tax rate and her marginal tax rate will likely be a factor.

If you have an accountant not sure why bother to post to a forum for advice?

Technically she could set up a discretionary trust (or a Post 22/2/2006 Interest in Possesion Trust) of the property in your name if all the income is to  go to you forever(?).  There really needs to be some thought about inheritance tax if she does not want the income from the property now given her age.  Trust law and taxation is particularly complicated and would be folly for me to try and explain the swings and roundabouts to you over a forum, so get some advice.

If all you have done is hire a High Street accountant to fill in an Self Assesment Form you are doing yourselves a disservice and potentially ingratiating yourself to Hector the TaxMan.  You need some fuller advice.

Best of luck.