Can spouse claim mortgage interest as an expense
I own a property in sole name which is rented out with a mortgage again in my name. I am setting up a Declaration of Trust of beneficial ownership so my wife will own 99% and I will own 1% as she is not working and will be looking after the rental property (and one she owns in her own name).
My wife will be paying the mortgage on the property in my name from her bank account (the same account the rent will be paid into) but can she claim the Mortgage costs as an allowable expense on her tax return.
Please only respond if you are pretty certain of the answer as I’m confused enough already 🙂
Regards
Bill
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Member Since February 2011 - Comments: 3453 - Articles: 286
1:02 PM, 9th April 2016, About 10 years ago
Hi Tony,
I fully understand as I did chase on your behalf for a call yesterday. In my absence this morning Mark Alexander has been speaking with our solicitors based on your feedback. Apologies once again and just in case you do end up needing our help if you struggle elsewhere then please email me directly on [email protected]
Mark and I never knowingly leave any reader hanging, but we do need to rely on professions for certain services and always follow up if there are issues.
Member Since May 2014 - Comments: 360
10:15 PM, 9th April 2016, About 10 years ago
Reply to the comment left by “David Pilcher” at “06/04/2016 – 21:02“:
The advice you have been given is correct. If you read the HMRC examples of acceptable “Deed of Trust ” arrangement you need to have a mortgage free property to which the rent is being paid to whom ever you elect. The second you have a mortgage involved it gets very messy and I am of the view as expressed by several professionals very easy that iHMRC will see it as tax avoidance. As one professional commented “HMRC want to be able to see the whites of your eyes” ( Don’t know what it means but thought to myself to do this properly) – transfer of title / joint mortgage / joint Account / pay the SDLT ..Ouch .
But sleep easy.
Member Since November 2014 - Comments: 86
11:01 PM, 9th April 2016, About 10 years ago
HMRC will see it as Tax avoidance! I should set up as an offshore company perhaps…Gibraltar, Malta any suggestions please? I am offended.
Member Since July 2015 - Comments: 6
9:55 PM, 10th April 2016, About 10 years ago
Hello all and thanks for all comments. I too spoke with Jenny from HR solicitors following advice on here and she advised my wife could not claim the mortgage expense. As the plan was for my wife to look after the BTL entirely and be liable for all costs (which would paid out of the rental income) we have now changed the DoT so I keep a higher %.
This way I can pay the mortgage interest from the % of rental income I will still keep. I’m still assuming I can claim 100% of this cost though as I’ll be continuing to pay 100% myself. It’s all very confusing really.
Cheers
Bill
Member Since July 2016 - Comments: 6
5:03 PM, 29th July 2016, About 10 years ago
Reply to the comment left by “Mark Alexander” at “07/04/2016 – 07:18“:
Hi Mark, please can I get an introduction to your accountants please?
Member Since July 2016 - Comments: 6
5:22 PM, 29th July 2016, About 10 years ago
Hi all,
I really need to help/advice on this, can anyone suggest a solicitor or an accountant? I’m having no luck with the folk at Hawkins Ryan.
I own 1 BTL, in my soul name and mortgage in my soul name (£270k).
Thanks