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Readers' forum: Difficult division

07 May 2019
Issue: 4694 / Categories: Forum & Feedback
Division of rental income between a couple.

Some months ago a husband and wife let out their townhouse which they own jointly and equally – they decided to move to the country. The husband is a higher rate taxpayer and his wife pays tax at the basic rate. They have informed HMRC of the letting and self-assessment tax returns will be required for 2018-19.

They have recently spoken to a ‘man down the pub’ – the tennis club in this case – who told them that there is an HMRC form they can complete to decide the proportion of the income on which each will pay tax.

Naturally my clients want to show the wife as having 100% of the rental income. While I am aware of the form will this not comprise income shifting or be treated as a settlement? The only reason they would sign is to pay less income tax. Further ...

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