Rental income – ‘A fair split’
An important point has recently come to light with regard to rental income and how it is split between owners of a property.
If you own a property with your spouse or civil partner you are obliged to split the rental income equally. However, if you own a property with someone else you can split the rental income in whatever proportions you like regardless of ownership.
This is significant for those who have spouses who don’t work but in effect run the property business and take all the income.
The only way to avoid this is to transfer the property into the spouses name, however if you have a mortgage on it this may not be possible as the mortgage company may not be keen to transfer to someone who has no other income, the minimum requirement is usually £20,000 income from a source other than the property.
If you think this is going to affect your tax position give us a call on 01252 848685 and we can talk through the options