9:01 AM, 2nd January 2019, About 2 years ago 2
My partner and I have renovated a cottage and let it out to a tenant. Even though it was a joint project we bought the property solely in my name, as we thought we might mortgage it in the future for another project. I am the main earner and put in the majority of the cash. My partner is self-employed and did the renovation work.
He currently works part time and looks after our child care commitments. A mortgage adviser told me that it would be better for any future project if only my salary was considered, hence the property being in my name only. We do not have a mortgage on this property and it is worth about £110k.
We have ended up in a situation where the rental income is coming to me, then I am giving half to my partner. I believe I am responsible for the full tax liability and the perceived income is moving me close to a higher tax bracket.
My questions are:
Have I understood the situation correctly as far as the tax liability is concerned?
Could I use a ‘Declaration of Trust’ or some other means to put the property into joint names and if I did this would it result in a capital gains tax bill for my partner?
Any advice gratefully received.
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