Allowable Expenses Split for 90/10 ownership?

by Readers Question

11:44 AM, 15th February 2022, 4 years ago 5

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Landlord News Landlords Questions

Hi all, I am a new private residential landlord. The property is jointly owned 90%-10%.

I am now looking for a definitive answer on how I should be splitting our allowable expenses for tax purposes.

I’ve looked everywhere online and can’t find an answer.

Do we need to split it 50/50, or can we split it as per ownership, ie 90/10 between costs?

Thanks in advance.

Colin

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Comments

Graham Bowcock Read Full Bio

Member Since January 2020 - Comments: 559

12:19 PM, 15th February 2022, About 4 years ago

What you should be splitting is the profit, ot the separated income or expenditure.

You need to do your P and L first of all, with all income and expenditure listed; then when you have got a profit you split that 90/10.

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Chris Bradley Read Full Bio

Member Since December 2019 - Comments: 241

12:24 PM, 15th February 2022, About 4 years ago

Income and expenditure split on
same ratio to ownership ( unless a deed of trust if beneficial ownership exists)

If income and expense split in same ratio final profit figure would be same ratio

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SCP

Member Since September 2021 - Comments: 213

1:22 PM, 15th February 2022, About 4 years ago

Answers by Graham and Chris are right.
To answer the original question: No, you cannot split 50/50. It has to be whatever the equitable ownership is: 90/10.
You can use Graham’s method today, which gives the same result.
However, when reporting individual figures for each taxpayer, you will have to do the correct split for each figure.
Rounding up/down is in taxpayer’s favour.

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T B

Member Since August 2017 - Comments: 3

8:35 PM, 15th February 2022, About 4 years ago

What if the joint owners are married or civil partners?

I would suggest full facts needed. But marriage makes a BIG difference.

@Colin You need Mark to answer this for you as he will understand the difference. But you also need to provide full facts.

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Chris Bradley Read Full Bio

Member Since December 2019 - Comments: 241

8:39 PM, 15th February 2022, About 4 years ago

There also needs to be a form 17 submitted to HMRC or they will assume 50:50 ownership if marries

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