Splitting Rental Income for Tax Planning Purposes

There are several ways to split rental income for tax planning purposes, the two most popular being a Declaration of Trust or one of many form of Partnership.

The concept is to transfer rental profits to a lower rate tax-payer. For example, one spouse may pay tax at a higher rate than the other.

This form of tax planning is particularly popular between spouses but can also be used for business continuity purposes.

However, before rushing into this you need to carefully consider the potential implications for triggering additional tax charges. There is no Capital Gains Tax on Transfers between spouses but there might be if you transfer property, equity or profit share in a Partnership to your children, other people or even a company.

Then there is Stamp Duty Land Tax to consider, which can sometimes even be triggered on transfers of property between spouses if mortgages are involved.

A consultation with a Property118 Tax Planning Consultant will direct you through this minefield and with the added peace of mind that all recommendations made are bespoke and considered by a fully qualified, regulated, experienced and insured practicing Barrister-At-Law before our recommendations are adopted as their professional advice.

These Consultations cost just £400 inclusive of VAT and also include a review of our recommendations which is carried out by Cotswold Barristers.