More time posting than coding
It must be. Never heard of it and I thought I had heard of the lot. Goes to show difference between England and Scotland despite all being part of Uk hmrc!!
Banned
Now if this was for your wife/partner, then you could use a specific part of s836 Income Tax Act (ITA) 2007 which states that income from property jointly owned by spouses/civil partners who are living together to be the equal income of those persons i.e. 50/50 each - and that this can be overridden if a declaration is made under s837 ITA 2007 by way of HMRC Form 17.
I doubt this would work for a parent, but it's worth running by a Property Accountant. I won't recommend my accountant in this case because it's quite specialised and I don't want to ruin his day.
Otherwise, set your mum up with a Management Contract whereby she is responsible for managing the property and for collecting the rent. She can collect the monthly rent take a 20% fee and pass on the rest to you.
If 20% isn't enough then you might be stretching the limits of what you can do without bordering on tax avoision (yes I said the made-up word that exists in HMRC's heads). You could sell her 50% of the house I suppose, but that will entail CGT and SLDT and then Inheritance Tax planning.
Nervous Newbie
Nervous Newbie
I think are you asking if this is illegal tax evasion? No - I give my Mum all the income from the property each month. I have been paying tax on it and then transferring her the balance for a few years now and a friend said there might be another way of doing it that would enable me to give her more each month. I understand others might be wanting to set up an structure purely to pay less tax themelseves that is illegal- but thats not my situation.
Nervous Newbie
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Thanks very much for this idea -its a good one although not sure it can work here. My Mum is mentally ill so cant be responsible for decisions/actions relating to the property. ie i manage it receive the income and pay the bills, i just give her the net income.
In the subletting structure you propose I assume it would only work if she could receive the income from the tenants/agents?
Nervous Newbie
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Thank you very much for the idea I hadn't heard of this term, much appreciated. I have read about in on a few websites. As the property has a mortgage I dont believe it will work unfortunately![]()
https://grigor-youngdotco.uk/propert...ions-answered/
Nervous Newbie